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  • Home
  • About Us
    • Our Company
    • Our Team
    • How We Work
    • Client Charter
  • Services
    • Protection
      • Why Protection is Important
      • Life Assurance
      • Family Income Benefit
      • Income Protection
      • Private Medical Insurance
      • Critical Illness
    • Wealth Management
      • Introduction to Wealth Management
      • Relationship Management
      • Lasting Power of Attorney
      • Trust Information
      • Wills
    • Business Protection
      • Introduction to Business Protection
      • Key Person
      • Share Protection
      • Directors' & Staff Benefits
      • Income Protection
      • Relevant Life Cover
      • Employers' Liability
      • Professional Indemnity
    • Taxation
      • Introduction to Taxation
      • Capital Gains Tax
      • Income Tax
      • Inheritance Tax
    • Savings & Investments
      • Introduction to Savings & Investments
      • National Savings Products
      • Endowments
      • ISAs
      • Equities
      • Collectives
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      • OEICs
      • Investment Trusts
      • Fixed Interest Investments
      • Capital Investment Bonds
      • Offshore Collectives
      • Junior ISAs
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      • Introduction to Pensions
      • Occupational Pensions / Auto Enrolment
      • Personal
      • Stakeholder
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      • SSAS
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      • Executive Pension Plan
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Inheritance Tax

Inheritance Tax (IHT)

The government levies tax on the value of a person’s estate, if their estate is worth more than the Nil Rate Band. The IHT ‘Nil Rate Band’ (NRB) is currently £325,000 (2024/2025) and many people are still getting caught in the trap of property inheritance tax as the threshold has not kept pace with the inflation of property prices, and so is affecting more and more people.

There is also an additional ‘main residence’ allowance (‘Property Nil Rate Band’ (PNRB)) which applies if a person’s home is given to their children (including adopted, foster or stepchildren), surviving husband or wife, or grandchildren. This is set at £175,000 (2024/2025) and is added to the IHT threshold providing a total allowance of £500,000 (2024/2025).

When a relative dies and leaves an estate worth more than £325,000 (2024/2025) or £500,000 (2024/2025) if the ‘main residence’ allowance applies, families are required to pay tax on the amount in excess of the NRB (and PNRB if applicable) within six months. After that, they are charged interest at a rate of 7.75% (2024/2025).

However, there are ways to lessen the burden of property IHT.

When you die, it is likely that you would wish to leave as much as possible for your loved ones. Unfortunately, this is often not as simple as you might expect. HM Revenue and Customs (HMRC) will apply 40% tax to the value of your estate over and above that of the NRB (and PNRB) that applies at the time of death.

No IHT is applicable on ‘inter-spousal transfers’ (money/property/assets that is bequeathed by one spouse (or civil partner) to the other.

Your estate could include more than you originally realise. It is often easy to dismiss IHT as something that may not affect you as your property may not be over, or much over, the IHT threshold. However, with all your other assets, such as investments, life cover, bank accounts, as well as physical property such as cars, furniture and family heirlooms, many estates are considerably over the threshold without the individuals being aware of it.

For assets passed between spouses and civil partners, the nil rate band allowance will pass along with the assets. This gives a couple available allowances (nil rate bands) of up to £650,000 (2024/2025), which increases to £1,000,000 (2024/2025) with the addition of the ‘main residence’ allowance detailed above.

For further information about Inheritance Tax please click here.

Inheritance Tax

Inheritance Tax (IHT)

The government levies tax on the value of a person’s estate, if their estate is worth more than the Nil Rate Band. The IHT ‘Nil Rate Band’ (NRB) is currently £325,000 (2024/2025) and many people are still getting caught in the trap of property inheritance tax as the threshold has not kept pace with the inflation of property prices, and so is affecting more and more people.

There is also an additional ‘main residence’ allowance (‘Property Nil Rate Band’ (PNRB)) which applies if a person’s home is given to their children (including adopted, foster or stepchildren), surviving husband or wife, or grandchildren. This is set at £175,000 (2024/2025) and is added to the IHT threshold providing a total allowance of £500,000 (2024/2025).

When a relative dies and leaves an estate worth more than £325,000 (2024/2025) or £500,000 (2024/2025) if the ‘main residence’ allowance applies, families are required to pay tax on the amount in excess of the NRB (and PNRB if applicable) within six months. After that, they are charged interest at a rate of 7.75% (2024/2025).

However, there are ways to lessen the burden of property IHT.

When you die, it is likely that you would wish to leave as much as possible for your loved ones. Unfortunately, this is often not as simple as you might expect. HM Revenue and Customs (HMRC) will apply 40% tax to the value of your estate over and above that of the NRB (and PNRB) that applies at the time of death.

No IHT is applicable on ‘inter-spousal transfers’ (money/property/assets that is bequeathed by one spouse (or civil partner) to the other.

Your estate could include more than you originally realise. It is often easy to dismiss IHT as something that may not affect you as your property may not be over, or much over, the IHT threshold. However, with all your other assets, such as investments, life cover, bank accounts, as well as physical property such as cars, furniture and family heirlooms, many estates are considerably over the threshold without the individuals being aware of it.

For assets passed between spouses and civil partners, the nil rate band allowance will pass along with the assets. This gives a couple available allowances (nil rate bands) of up to £650,000 (2024/2025), which increases to £1,000,000 (2024/2025) with the addition of the ‘main residence’ allowance detailed above.

For further information about Inheritance Tax please click here.

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Echo Wealth Management Ltd is authorised and regulated by the Financial Conduct Authority and entered on the Financial Services Register (https://register.fca.org.uk/s) under reference: 943133.

Registered Address: 9 Fitzroy Place, Glasgow, G3 7RH.

Registration number: SC486212 Registered in: Scotland

The information contained within this site is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK.

If you have a complaint about your adviser, or any financial advice you have received from your adviser, please contact us.

If you cannot settle your complaint with us, you may be entitled to refer it to the Financial Ombudsman Service (www.financial-ombudsman.org.uk)

 

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