Inheritance Tax Planning Services

Inheritance tax (IHT) is a tax paid on the estate of the deceased, including property, possessions, and money. For many, IHT seems like an inevitable part of the inheritance process.

However, at 6 Wands we are AAT Licensed in Inheritance Tax and specialise in IHT planning services for our clients, which can be used to mitigate the effect of IHT as much as is possible.

Whether you’re looking to minimise inheritance tax on the value of your estate for your loved ones or simply want to know what to expect, Six Wands Accountants can offer advice and guidance.

How Do Inheritance Tax Planning Services Work?

Inheritance tax planning services usually begin with your chosen accountant completing a review of the current value of a client’s assets and what they currently stand to face in terms of IHT. This review then progresses to involve an investigation into how the effect of IHT can be reduced.

Are There IHT Exemptions?

IHT exemptions depend on the value of your assets and can quickly become confusing. Generally, if your estate is below the £325,000 threshold or you leave everything above this threshold to a charity, your spouse/ civil partner, or an amateur community sports club you normally won’t have to pay inheritance tax. The threshold can also increase to £500,000 if you give your home away to your children or grandchildren.

Once over this threshold, the standard rate for IHT is 40% of your estate’s value that is over the threshold. Please be aware, even if your estate’s value is less than this threshold you will still need to report to HMRC and follow due legal process.

Can IHT Be Mitigated?

There are a variety of ways you can work with your accountant to reduce the amount of IHT that will have to be paid. These include, but are not limited to:

  • Charitable gifts.
  • Maximising usage of annual exemptions, available exemptions include annual gift allowance.
  • Passing assets known as lifetime gifts to the next generation - these transfers have the potential to be exempt.
  • Identifying and pursuing any reliefs available, for example, business property or agricultural relief.

When Should I Begin IHT Planning?

Ideally, inheritance tax planning should begin as soon as possible. By maximising the amount of time your accountant has to complete their review and mitigate the impact of IHT on your assets, you increase your chances of having the maximum amount of reduction on this tax, allowing your loved ones to directly benefit. Tax reliefs that can significantly reduce IHT take the longest to implement and take effect, often taking at least two years and sometimes much longer.

IHT Planning With 6 Wands

Making use of inheritance tax planning services is the most effective way to protect your assets for the next generation. If you’re thinking ahead, contact Six Wands today to get started on your personalised IHT plan and to access further accountancy support specific to your circumstances.