Pembroke Wealth Management: 
holding on to the family silver
Even though house prices have fallen recently, more and more estates are getting caught up in the Inheritance Tax trap. With a threshold this tax year of £325,000 for individuals (£650,000 for married couples and civil partners), the average price of a house in London is already in line with the individual allowance – and the South East is two thirds of the way there†.
† Source: Land Registry of England & Wales, House price index, as at 30 April 2010. Tax advice is not regulated by the Financial Services Authority
As a UK resident, your estate is valued as the total of everything you own, including those things which you have only a share in or simply derive benefit from (including income). Inheritance Tax then becomes payable on everything valued above the allowance by those to whom you leave your estate when you die. If you make no plans in advance, this liability will be met through sale of assets before the inheritance is passed on.
This could mean simply selling shares or closing bank accounts but, if such liquid assets are not available, could instead mean your house or even a treasured heirloom. And this all has to happen within six months, so the price obtained may fall short of the sentimental value.
Thankfully, there are ways to plan – exemptions, lifetime gifts and access to life assurance, perhaps within trusts, can all help you save the family silver. However, the tapering of liability on gifts over 7 years means you need to think well in advance.
Our Tax Planning Service is designed to help you make a full assessment of your own situation. By comprehensively reviewing your assets, your objectives and your liabilities, we can help you minimise your liability to all taxes, not just Inheritance Tax.
For more information, without obligation, call us today.
