Estate Planning – Nil Rate Bands

When you die your estate is assessed for inheritance tax. Early tax planning can mitigate the amount of tax your estate has to pay leaving more for your loved ones. You’ve worked hard for your wealth why give it away? We can help advise you on how to best structure your estate so you can pass on more of your wealth to the people you want it to go to. We can do this through using a will.
We all have what is known as a Nil Rate Band for the tax year of 2020 this is currently £325,000. The Nil Rate Band allows you to pass on up to £325,000 to your beneficiaries without any charge. Nil Rate Bands are also transferable so if you have a deceased spouse and they have not used their Nil Rate Band you can make use of that too. The unused amount is based on the percentage they haven’t used and as long as the executors of the will make an election within two years of death amount over this is taxed at 40%.
In addition to this if you are passing on your main home to direct dependents you can have an additional £175,000. The value of the property must come off first and then the residual amount can then be used against the estate. If your estate is valued over 2 million pounds the residence nil rate band will reduce by £1 for every £2 over. As with the nil rate band the percentage of unused resident nil rate band can also be transferred.

Call us today to see how we can help you write your will in a way that helps you preserve your wealth for the people you want it to go to.