With the end of the tax year only two months away it is a good time for those concerned about Inheritance Tax to review their assets and make sure they have been taking advantage of all available allowances.
Inheritance Tax is payable at the rate of 40% if a person’s assets at death, plus the gifts made by them in the seven years before death exceeded their “Nil Rate Band”. The Nil Rate Band is currently £325,000 (and has been so since 6 April 2009) . It is frozen at this level until Tax Year 2014/2015. The freezing of the threshold for a six year period is likely to bring more individuals into the scope of the tax.
There are a number of exemptions and allowances available but at this time of year it is worth checking if you have used your annual gift allowance of £3,000. If this allowance is not used in a particular year it can be carried forward – but for one year only. Small gifts of up to £250 per donee are also exempt.
In some circumstances regular gifts out of excess income can be exempt. It is a good time of year to take stock of your income and expenditure to date to see if you can take advantage of this generous allowance.
Inheritance Tax planning needs to be tailored to your individual circumstances and it is not always wise to rely on generic advice.
We would be very happy to talk to you about your personal circumstances.
