UK Inheritance tax and succession planning
We have significant expertise in advising clients on how best to mitigate the impact of inheritance tax (IHT) and ensure that the wealth they have created is protected for the long-term benefit of their families.
Our UK tax services are offered from Progeny Law & Tax Limited within the UK.
Mitigating the impact of inheritance tax
We provide tax advice tailored to clients’ personal circumstances and work with their lawyers and wealth advisers to ensure that we consider all potential planning opportunities. This generally starts with ensuring that they have a tax-efficient Will, which not only maximises tax efficiencies but is written to protect the wealth of future generations from IHT and the breakdown of relationships.
We also consider the tax-efficiency of clients’ assets and whether they can make investments that would reduce the value of their estates while retaining sufficient income to ensure that they maintain their current standard of living. Where appropriate, we may also advise on the tax benefits of investing in assets that qualify for business relief.
As with all of our planning, family investment company and trust structures need to be formulated based on a thorough understanding of your personal circumstances. This is why we spend the time to develop long-term relationships with our clients to tailor our advice to meet their objectives.
Our comprehensive range of services aim to assist in navigating the complexities of your finances, allowing you to make the most of your money.Â
Progeny Law and Tax have been selected as one of the Top Law Firms by eprivateclient which recognises the top private wealth law firms and departments across the UK.
With dedicated offices worldwide, we can provide advice across the globe – helping you go anywhere.
Planning for the next generation
We have extensive experience planning for IHT and can support you with:
01
Succession planning
Our dedicated team is experienced in all aspects of succession planning, from Will writing, organising Powers of Attorney, to business succession planning for family firms.
02
Trusts
Trusts can be incredibly tax-efficient structures in the right circumstances and allow you to retain control of the assets within them to ensure that they are protected for the benefit of your family. We can provide advice on how trust structures can be used to mitigate your IHT liabilities but also provide a tax-efficient structure for paying nursery, school and/or university fees.
03
Residence Nil-Rate Band
The Residence Nil-Rate Band is an additional allowance, introduced in 2017, which generally applies if you leave your main residence to your direct descendants. As well as your children or grandchildren, your ‘direct descendants’ can include any stepchildren, adopted children and foster children.
04
Inheritance tax
If you are UK domiciled, IHT is applied to your entire worldwide estate. There is an allowance, known as the nil-rate band, which currently sits at £325,000. If your estate is valued at less than this allowance IHT will not apply. Married couples, or those in civil partnerships, can enjoy their own allowance, creating a joint nil-rate band of £650,000. There are also a number of other exemptions that can be used to help reduce IHT.
Advice Guides
A Basic Guide to Inheritance Tax
Progeny Private Law’s basic guide to Inheritance Tax. In the UK, Inheritance Tax is, broadly, the tax levied on the value of the estate that yo…
Progeny Private Law’s basic guide to Inheritance Tax. In the UK, Inheritance Tax is, broadly, the tax levied on the value of the estate that yo…
Read more
Applying for Inheritance Tax share loss relief after a market downturn
Losing a loved one can be a difficult time in anyone’s life, and is an occasion when they will need as much support and advice as they can gather fr…
22nd March 2022
Losing a loved one can be a difficult time in anyone’s life, and is an occasion when they will need as much support and advice as they can gather fr…
Read more
Frequently Asked Questions
Inheritance tax is charged on your estate (most often your property, money and possessions) when you pass away. It is generally charged at the rather staggering flat rate of 40% and so can have a significant impact on the value of your estate, and the amount that your heirs will inherit.
The IHT rate in the UK is generally set as 40% of any value over the available allowances. This can be reduced to 36% if more than 10% of the estate is given to charity. To calculate the Inheritance Tax, the Executors of the estate need to add up the value of all the assets and subtract any debts, bills and funeral expenses.
The executor of the estate is usually liable for paying IHT. While the beneficiary of an estate does not normally pay IHT, they may be charged if the deceased’s estate cannot or will not pay it.Â
Inheritance tax in the UK is generally payable six months after the person has died. For example, if the deceased passes away in January, inheritance tax must be paid by July 31. The standard Inheritance Tax rate in the UK is 40%. It’s only charged as part of your estate that’s above the threshold.Â
In some cases those who received gifts from the deceased within the seven-year window prior to death may also have to pay Inheritance Tax.Â
Each individual is taxed at a rate of 40% on all their assets above a threshold of £325,000. This threshold is known as the nil-rate band.Â
Succession planning ensures the wealth you have created gets passed onto the right people, at the right time. You can succession plan for your estate, or a business.
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