Important information and addresses

TAXES AND BENEFITS

Will (testament) and donations

Property planning

Few of us are willing to think about dying, however, none of us would like to live knowing that they have not properly secured their family in case of their death. There are two basic methods of securing loved ones - by a donation (Gift) executed during one’s lifetime, or a testament (Will), which regulates property matters after death. The legislation in force in both cases requires careful planning in a sufficient advance.

 

It is never too early to start transferring property to selected persons. It's best to do it during one’s lifetime because the rule is the sooner assets are transferred to the beneficiaries, e.g. children, the smaller the IHT: Inheritance Tax. Assets that do not exceed the value of £ 325,000 are exempt from inheritance tax. However, anything above this amount is charged with a high 40% inheritance tax (IHT). Donations made up to 7 years before death are added back to the value of the deceased's estate, but they are partially exempt from inheritance tax (IHT), thus, it is worth taking advantage of these concessions.

 

Current inheritance tax (IHT) rates and thresholds

 

Current Inheritance Tax Threshold

Inheritance tax exemption threshold (Nil Rate Band)

Inheritance tax exemption threshold for married couples or partners

Inheritance Tax Rates

Property exceeding the threshold, transferred after death or within 7 years before death  

 

Lifetime Gifts tax brakes

Number of years before death that the property transfer took place:  

Amount of inheritance tax reduction:

As you can see from the above table, the earlier You transfer the inheritance, the greater the chance of full use of available tax breaks. Of course, it is important that the beneficiaries receive as much of the inheritance or donation as possible. There is nothing more disheartening than knowing that a huge part of the estate, which You have worked hard on throughout Your entire life, will go to the state coffers. Unfortunately, this is a very common situation when inheritance planning and donations are neglected and left for later.

 

After transferring property to children or grandchildren it is also important to secure Yourself and Your spouse for the future, yet many people forget about this. Maintaining these principles requires considerable skills and foresight as well as sufficient knowledge of the tax system.

Capital Business Links Ltd offers a full set of services that allow convenient property disposal in the event of death, including, but not limited to: 

 

  • Assistance in will preparation and review

  • Full use of exemptions and lower tax rates with lifetime transfers

  • Optimizing lifetime transfers between spouses

  • Signing over farms or business property

  • Transferring assets to a trust

  • Organizing an adequate life insurance in order to cover potential inheritance tax.

It is worth mentioning here that due to effective inheritance planning, currently only 5% of inherited assets are subject to inheritance tax .We advise starting inheritance planning as soon as possible, it will save a lot of money that can otherwise end up in the state treasury as inheritance tax.

 

For more information and efficient transfer of assets, please contact Capital Business Links Ltd at 0208 567 9944 or e-mail.

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25 First Avenu , Milton Keynes , MK1 1DX

Tel:01908 824444

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