Inheritance Tax Planning

Understanding inheritance tax. Expert guidance when you need it most.

When it comes to inheritance tax, having the right support makes all the difference. Our experienced private client team guides you through the complexities of IHT planning, helping protect what matters most to you and your family.

Understanding your inheritance tax position

Currently, inheritance tax applies to estates valued above £325,000 (known as the nil-rate band), with a rate of 40% payable on the portion exceeding this threshold. However, there are several ways to reduce or manage this tax burden:

The residence nil-rate band

If you own property and plan to leave it to direct descendants, you may benefit from an additional allowance of up to £175,000. This valuable exemption applies to estates below £2 million and can significantly reduce your inheritance tax liability.

Spousal and charitable exemptions

Assets passed to your spouse or civil partner are typically exempt from inheritance tax, regardless of value. Additionally, leaving at least 10% of your estate to charity could reduce the inheritance tax rate from 40% to 36% on the remainder of your estate.

Maximising your allowances

For married couples and civil partners, any unused portion of the nil-rate band can be transferred to the surviving partner, potentially doubling the tax-free threshold. The same applies to any unused residence nil-rate band, offering substantial planning opportunities.

Practical considerations

1. Timing and Payment
   • Inheritance tax must be paid before the Grant of Representation can be obtained. This typically requires:
     • Full payment on liquid assets
     • At least 10% payment on property assets
     • The remaining balance can be spread over ten annual instalments
2. Important Deadlines
   • Tax payment is due within six months of the end of the month of death
   • Tax forms must be submitted within 12 months to avoid penalties
   • Interest applies to late payments

How Morr & Co help with inheritance tax planning?

Our dedicated private client team offers:

• Clear guidance through the inheritance tax landscape
• Strategic planning to maximise available allowances
• Support with timing and payment arrangements
• Expert handling of all necessary documentation
• Practical solutions tailored to your circumstances

We’re here to help navigate the complexities of inheritance tax. Contact our team for practical guidance and support that puts your needs first.