For example, generally, if your estate is valued at £325,000 when you die (including certain gifts you have made in the 7 years before you die) you will have to pay Inheritance Tax at 40% on everything over that level. Income Tax and Capital Gains Tax can also raise their heads.
This is not only a lot of money for your family and beneficiaries to lose out on. In practical terms it can be a problem finding the money to pay the tax if you or the estate are property rich but cash poor. Often, precious assets have to be sold to pay the tax if money cannot be found or borrowed.
If only you could give your property away before you die - that would ensure your estate never hit the £325,000 threshold at which Inheritance Tax becomes payable. Sadly, there are rules in place that can bring the value of assets you have given away during your lifetime back into your estate when the tax man works out whether you have hit the Inheritance Tax threshold.
Despite these rules, there are still a number of steps you can take whilst you are alive, including in your will, that can help you to reduce the tax that you would otherwise have to pay. Details are set out in "Lifetime Tax-Planning", below. A key part of lifetime tax-planning is the potential to properly give assets to other people whilst you are alive thus taking them out of your taxable estate. These opportunites are covered separately below at "Lifetime Gifts".
Our Private Client Team would be delighted to hear from you if you would like to talk through your circumstances and wishes. They would give you guidance at no cost to you and would give you a price quote if they believe they could help you with any actual legal work. You would then be free to "shop around".
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