Wills and Inheritance Tax

A well known way to avoid inheritance tax on your death is to make a will so that you make best use of the allowances to you during your lifetime.

Of course, the main reason for making wills should not be to avoid inheritance tax, but to plan where your assets should go when you die.

If you do not make a will, you will die intestate. This means that you will lose control over the final destination of your assets (regardless of inheritance tax planning), and the state will decide the priorities based on an outdated formula. For example, if you are married, you could find that some of your money will go to your spouse, and some could go to your children. However, the amounts will not be determined by your choice or the needs of your family, but on a complicated formula.

Our advice to anyone seeking to plan for inheritance tax would be to make a will first, especially if you are married. By making a will you should be able to make best use of the available reliefs due to you, especially if you are part of a married couple.

Inheritance Tax wills used to be a good way to help you to save a lot of tax. However, recent changes by the Government have meant that for married couples and civil partners this will no longer be necessary. For these people, the unused threshold of the first to die can be carried over, meaning that they can effectively double their inheritance tax threshold on second death.

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A note of caution, however! These inheritance tax wills are technical, and need to be explained to you by a professional. If you feel that you would like to discuss this subject, please contact us.