IHT planning is not a service only for the wealthy. Rising property prices mean that without proper planning, most people will fall into the IHT net when they die. That means your loved ones will have to pay 40% Inheritance Tax on the total net value of assets over £325,000, or £650,000, depending on your marital status. Assets subject to IHT include property, businesses, cash and investments, and life insurance policies.
At Soteria Trusts, we are not only concerned about the ‘here and now’ but also for your future and beyond your lifetime.Arrange a free IHT Planning consultation with one of our advisers
The Soteria IHT Planning Service was developed to assist with the reduction or mitigation of the five main taxes that are associated with UK property ownership.
From 20 - 45% per annum of property rental.
Up to 17% of residential transaction value.
28% of gains made on property from April 2015. Other investment gains charged at 18%.
From £3,700 - £236,250 per annum.
40% of value of net estate over Nil Rate Bands (NRB’s) of £325,000 for singles & £650,000 for couples.
IHT is payable on the value of anything you leave behind when you die. The IHT rate is 40% and due on any amount above £325,000 for an individual, and £650,000 for a couple.
*This assumes that you're not entitled to the residence nil-rate band, that your assets will not qualify for business relief and that you’ve not made any gifts in the last seven years.
Protecting your wealth is the goal of Soteria’s IHT Planning Service. We will guide you through the planning process and advise you on the best possible solutions tailored to your specific needs. To give you an overview of the IHT Planning Service and its various strategies, we have a checklist of things that you can do to reduce your IHT:
The starting point for any Estate and Inheritance Tax plan is to have a Last Will and Testament or a Will in place. Not only does it avoid any future family conflict, but an effective Will can also help your beneficiaries reduce the overall tax liability of your estate.
Pensions that meet the criteria of being a registered pension, as defined by ‘HMRC’ are exempt from IHT following a member's death. The Trust ensures that the pension assets (your contributions) are kept separate from those of other members and are exempt from CGT once held within the pension.
While not directly related to Inheritance Tax planning, it is related to property and so forms part of the service. With as many as 1 in 4 property transactions in the UK making an overpayment, Soteria Trusts can help you reclaim overpaid Stamp Duty Land Tax. Reclaims can be sought on any UK property purchases that have happened in the last four years. Learn more about SDLT Returns here.
If you are domiciled in the UK, all of your assets (even international ones) are within scope for IHT on death, which is charged at the rate of 40% over the Nil Rate Bands. However, UK nationals who have their permanent home ('domicile') outside the UK, pay IHT only on their UK assets.
Trusts have been used for centuries to protect assets from taxes and probate. The cash, investments, pensions, and property that are held in the trust, legally belong to the Trustee, who, acting on your instructions, can transfer the assets to your beneficiaries whenever you want them to have them. Learn more about how Trusts work here.
Soteria Trusts currently offers four types of trust accounts:
Download Soteria’s IHT Planning Guide for more information and real-life examples of IHT mitigation success stories.
There are certain tax allowances you could use to reduce the value of your estate and the IHT bill. For example, if you pass on a home to your spouse or civil partner, there is no IHT liability, but if you leave it to another person who is not a direct descendant, then IHT will apply.
Another tax allowance that can decrease your estate’s value, and IHT as a result, is an allowance for gifts of up to £3,000 each tax year. Gifts exempt from IHT can include cash, property, valuable possessions, such as jewellery or art. Gifts don’t count towards the value of your estate after seven years.
Corporate structures are often set up to hold assets such as physical property and can reduce certain personal taxes, such as Capital Gains Tax, and SDLT, but they are not effective when it comes to IHT. If you hold assets in a corporate structure it may be the case that they are not IHT efficient as you might think. Contact us for a review of your holdings, and we can advise you on the most efficient way to legitimately reduce your IHT liability.
Download this guide for more information about tax liabilities for non-UK-residents.