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Whether you stand to inherit or leave money

Using a specialist adviser who could help you to properly understand and plan your estate could save you a fortune when it comes to Inheritance Tax.

Planning your affairs for after you are gone might not be a subject you like to think about, but being pro active in organising your financial affairs could mean the difference between setting your loved ones up for an easier future or leaving them with a great headache as well as the loss of a loved one.

It’s more and more likely that you will need to consider inheritance tax in your financial plans. Although it used to affect only the very wealthy, a general rise in house prices over the past decade means that more people have fallen into the inheritance tax bracket.

Inheritance tax is payable if the value of your estate exceeds £325,000 (in the tax year 2013/14). Tax on any part of your estate above this threshold may be charged at 40%. However, there are various exemptions and reliefs available, and it is sometimes possible to use the nil rate band of a spouse or civil partner who dies earlier.

Your estate includes everything you own, less any outstanding debts, when you die. Even if you give away some of your assets during your lifetime, such as property or money, they may still be included in your estate if they are given away within 7 years of your death.

There are ways that you can reduce the potential inheritance tax bill, or even eliminate it altogether. Please note that tax rules can change in the future.

Valid and up to date Will?

This is often a very hard and contentious issue to bring up with close family and friends, but don’t be shy in coming forward about the importance of having an up to date Will. Should the worst happen, if you haven’t made a Will, then the law gets to say what assets get shared out to whom and how much. It is also an effective a way of planning how much tax might be paid on your estate. 

Where there is only a basic Will in place, your assets are exposed to the following risks!! 

  • Care Costs – If the surviving spouse needs nursing care, then the whole estate, including the family home, would be susceptible to the cost of that care. 
  • Marriage After Death – On first death, all the assets become solely owned by the surviving spouse. What if the surviving spouse remarries? Half of the inherited estate could be lost in any divorce settlement, or even worse, all of the estate could be lost, disinheriting your children. 
  • Creditors or Bankruptcy - If the surviving spouse was subject to creditor claims/bankruptcy, then the inherited estate is fully at risk. 
  • Inheritance Tax (IHT) – IHT would have to be paid on any amount inherited in excess of the current Nil Rate Band and so there is the potential to pay IHT on the same asset twice. Known as the double whammy! 
  • Your Business Assets – Without the correct planning, the business may have to be sold and these assets may not be preserved for your family. 

On second death there are further risks to the inheritance!! 

  • Your Bloodline – If your children/grandchildren/chosen beneficiaries are subject to divorce proceedings, then half of the inheritance is at risk to divorce settlements. 
  • Your Children’s future Care Costs - If the inheritance has been passed to your chosen beneficiaries absolutely, these assets could later be assessed for their own care costs. 
  • Creditors or Bankruptcy - Similarly, if any of your beneficiaries were subject to creditor claims/bankruptcy, then the inherited estate is fully at risk. 
  • Generational IHT – On second death, if the inheritance of the remaining estate is directed by the survivors Will to the children absolutely, then this adds to the children’s estate and could impact on their own Inheritance Tax.

Call us now for an initial Inheritance Tax planning consultation without charge.

Taking into account all your options for tax mitigation and tax efficient planning could give you peace of mind knowing you have done everything you could to preserve what you have made for your loved ones. Please get in touch for Honest Effective Life Planning 

We conduct Inheritance tax business all over the country but the main areas we service are: Sheffield (All encompassing but mainly Dore, Totley, Bents Green, Whirlow, Tapton), Bakewell, Baslow, Chesterfield, Buxton, Matlock, Alfreton, Belper, Chatsworth, Stockport, Wilmslow, Prestbury, Cheadle Hulme, Didsbury, Alderley Edge, Chapel En le Frith, Dronfield, Barlow, Cromford, Clay Cross, Barnsley, Hazel Grove, New Mills, Tideswell, Eyam, Edale, Castleton, Ashford in the Water, Bradwell, Bamford, Grindleford, Frogatt, Calver.

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“We have been clients of Andrew Stuart and Company for a good many years and have always found them to be professional, helpful and good communicators. They have always kept their finger on the financial pulse. We have no reservations in recommending this Company.”

Mr & Mrs B Edwards

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Andrew Stuart & Co is an independent marketing website which acts as an introducer to various companies who offer specialist Financial Advice. Each company is authorised and regulated by the Financial Conduct Authority. andrewstuart.co.uk are not authorised to give advice and we are not liable for any financial advice provided by, or obtained through a third party. The information published on this website is for information purposes only.