We spoke to Operations Director & Solicitor Stuart Maher on the importance of prior planning in order to help reduce your inheritance tax (IHT) bill.

Latest figures from HMRC show that inheritance tax receipts have risen by 7.2% since last year.
By taking advantage of available tax reliefs and planning carefully, families can make sure their loved ones pay the bare minimum on their tax bill and get the most out of what they inherit from their loved ones.

Stuart Maher, Director & Solicitor here at Watson Ramsbottom and member of The Association of Lifetime Lawyers says there are precautionary measures to bear in mind if you plan for family members to inherit part, or all of your estate upon your passing.

Stuart said: “With more estates than ever liable for IHT, it’s crucial to plan ahead to avoid a large tax bill for your loved ones. If the value of your estate is below the current nil rate band allowance of £325,000, no inheritance tax (IHT) is owed, provided the allowance hasn’t been reduced by relevant lifetime gifts.

“For married couples or civil partners who leave their entire estate to each other, HMRC permits the full transfer of the nil rate band to the surviving partner, effectively doubling the allowance to £650,000. Even if only a part of the estate goes to the spouse, the unused portion of the nil rate band can still be transferred upon the death of the second spouse.

“Additional allowances may also be available in relation to your residential property, which can in some specific circumstances permit up to £1,000,000 to be left to your loved ones without payment of any inheritance tax.”

“If your estate includes a business or related assets, at present, additional reliefs currently apply at rates of either 50% or 100%. Likewise, certain agricultural properties, such as land used for rearing animals or growing crops, can pass free of IHT, provided specific criteria are met.”

“Creating a will is essential to ensure your assets are distributed to your chosen beneficiaries. Without a valid will, your estate will be divided according to the intestacy rules, which may result in your family not receiving what you intended. Research shows nearly half of UK adults (49%) do not have a will. It’s important to consult a legal professional to help you draft a will.

“Given the recent change in government, we’d recommend keeping an eye out for any potential policy changes and speak with one of our Solicitors to help minimise your tax bill.