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Inheritance Tax Planning

What is Inheritance Tax?

Inheritance Tax is a tax based on the value of your estate at the time of death.

Each person is given an allowance on their estate, currently £325,000, which is exempt from inheritance tax. This is known as the ‘nil rate band’.

If the value of your individual estate is greater than £325,000, your beneficiaries may have to pay 40% Inheritance Tax on the amount of your estate which exceeds your  allowance.

Value of your estate

Inheritance Tax Liablity

Single PersonMarried couple*
£325,000NilNil
£500,000£70,000Nil
£650,000£130,000Nil
£1,000,000£270,000£140,000
£1,500,000£470,000£340,000
£2,000,000£670,000£540,000

*For couples (married or in civil partnership) there is the potential to transfer any unused Inheritance Tax allowance when the first partner dies however this is based on the circumstances of the couple and advice on Inheritance Tax planning should be sought. Any increase in allowance must be claimed because it is not automatic. This assumes the estate passes in full to the spouse or civil partner.

With forward planning it may be possible to avoid or reduce the amount of Inheritance Tax payable by possibly using a trust, life assurance or other tax efficient investments.

If you find that you have a potential tax  liability, simply contact an Ecclesiastical Independent Financial Adviser (IFA). They can

  • help you accurately assess your Inheritance Tax liability

  • unravel the complexities of the Inheritance Tax rules

  • advise on assets you can pass on without  having to pay Inheritance Tax e.g. gifts

  • advise on inheritance tax efficient products and services e.g. trusts, funeral plans

  • help you make adequate plans to minimise your estate’s Inheritance Tax liability

  • ensure that you have the necessary legal documents in place such as a will or a trust.

Please note that your tax treatment will depend on your individual circumstances.
Rates of IHT are based on current tax legislation and could be subject to change in the future.
Ecclesiastical Insurance Group plc (EIG) Reg No 1718196. Ecclesiastical Insurance Office plc (EIO) Reg No 24869. Ecclesiastical Life Ltd (ELL) Reg No 243111. Ecclesiastical Financial Advisory Services Ltd (EFAS) Reg No 2046087. Ecclesiastical Underwriting Management Ltd (EUML) Reg No 2368571. E.I.O. Trustees Ltd Reg No 941199. EdenTree Investment Management Ltd (EIM) Reg No 2519319. All companies are registered in England at Beaufort House, Brunswick Road, Gloucester GL1 1JZ. EIO and ELL are authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number 113848 (EIO) and 110318 (ELL). EFAS and EIM are authorised and regulated by the Financial Conduct Authority. Firm Reference Number 126123 (EFAS) and 527473 (EIM). EUML is an appointed representative of EIO who is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number 402228.