Inheritance Tax Videos
Learn about Inheritance Tax through our short informative videos.
Estate Planning and Inheritance Tax
The tax position on death can be extremely harsh for any individual who has a net Estate value of more than £500,000 or for couples of more than £1 million. With high property prices and frozen allowances, this affects many families and this number is predicted to grow. However, it is not just about tax, as many people want to leave their affairs in order and with clear legacy goals attached. This video explores the subject by explaining that Estate Planning is different from Inheritance Tax Planning, and how the two interact.
Residence Nil Rate Band
The Residence Nil Rate Band (RNRB) is the added allowance that many people enjoy which increases the “Nil Rate” of tax applied to an estate when it becomes subjected to Inheritance Tax (IHT). In the right circumstances, this can raise the level of Nil Rate from £325,000 to £500,000 for each individual and from £650,000 to £1 Million for a couple.
The RNRB applies to residential property, but this extra amount, which can save a big chunk of tax payable is subject to quite a few conditions and it is feasible that it can be lost or become reduced without proper pre-planning.
This is a video that both explains how the RNRB works and also the things to look out for and consider if you are in the position where it may apply.
Inheritance Tax Lifetime Gifting
Arguably, there is nothing in the financial world where the gap between perceived simplicity and actual complexity is bigger than when it comes to lifetime gifts.
Many people think that making a gift is an easy and largely private affair. If you want to help out a family member, such as one or more of your children, with some funds, say to buy a property, then it is straightforward – right?
Yes and no is the answer, No one will stop you from gifting anything away, but the tax consequences of doing so can be horribly complex. It can have, for example, a profound impact on your Inheritance Tax position.
This video aims to explain why making gifts in your lifetime is an area where it pays to take advice first because there are many pitfalls and convoluted tax rules to take into account.
Inheritance Tax and Your Pension
The relationship between your pensions and Inheritance Tax (IHT) is far from straightforward. By and large, pensions are exempt from IHT. But not always. So, it is important to know the exact position with any pensions you have.
In most cases they are exempt, and it is in these instances that smart financial planning can be applied to make the most of this tax-free status.
If a pension is inherited it can often be without any IHT payable by the beneficiaries. This means it can sometimes be beneficial to take retirement income from other sources before the pension is touched if IHT planning is relevant.
This creates a potentially complex financial position and specialist advice can prove invaluable.
The video explains more about the subject, and how to approach considering what to do for the best.
Inheritance Tax and Exemptions
Every individual has a series of exemptions when it comes to Inheritance Tax (IHT). This sweeps up your IHT allowances and certain assets/investments which can be exempt from IHT, and are not added to your “taxable estate”.
Understanding and using these exemptions can make a big difference to the eventual IHT bill that your beneficiaries face. In the right circumstances, it is possible to reduce an IHT liability to zero, even for estates that would otherwise be paying significant tax.
This is a complex area and as the video outlines it is important to have a good working knowledge of what exemptions can be applied, and when, and to know how to set out a financial plan to make the most of them.
Getting good quality advice can make all the difference.
Inheritance Tax - Frozen Allowances
There are two main Inheritance Tax (IHT) Allowances, the Nil Rate Band and the Residence Nil Rate Band. Both have been frozen until 2026. This matters, because it means that any rise in estate value is not being matched by the zero tax (Nil Rate) amount. Effectively increasing the potential tax payable, and in some circumstances, this could be by a substantial amount.
This creates a “stealth tax” effect and for anyone with an estate either close to the Nil Rate levels or above it, this could have quite an impact. These allowances start from £325,000 rising to £500,000 per individual. With house price increases alone in the past few years, this creates a big net that envelopes a lot of people.
The video explains more and suggests ways individuals and couples can tackle this to offset the static allowance levels.
Inheritance Tax - Life Assurance, Trusts and Charity
In making plans to leave a legacy and aiming to reduce or negate Inheritance Tax, there are occasions when putting in place life assurance may be the best solution.
This is somewhat counter-intuitive, as most people planning their estates tend to be of any age where they consider life assurance is probably going to be too expensive. This is not necessarily the case.
Likewise, most consider trusts as an option only for the mega-wealthy. This is far from the truth, trusts can be an exceptionally smart way to get assets outside of an estate for any individual or couple, regardless of their wealth level.
Finally, charity giving is a common goal or wish for people who want to make a bequest on death. This opens up an interesting angle in making plans to save Inheritance Tax.
This is a video that explores each of these aspects, explaining how they link into the planning and their unique possibilities for helping in certain cases.