Inheritance tax remains a topic of confusion for many.
Essentially, inheritance tax refers to a tax on the estate of someone who has passed away.
The estate might consist of a person’s property, money and possessions.
If your estate is valued at below the £325,000 threshold or you opt to leave everything to your spouse, civil partner, a charity or a community amateur sports club, there will usually be no Inheritance Tax to pay.
If you decide to pass your home onto your children (including adopted, foster or stepchildren) or grandchildren, your threshold will increase to £425,000.
Some estates qualify for an additional threshold, sometimes known as the property nil rate band. This was introduced earlier this year and states that if someone were to pass away with an estate that is above the basic Inheritance Tax threshold, the estate could be entitled to an additional threshold before any inheritance tax is due.
This additional amount, for 2017 to 2018, is up to £100,000. This figure will go up annually.
If you have a question about inheritance tax and would like to ensure that your affairs are being organised in the best way, contact Alan Mellor on 0151 353 1066.