Being an investor I have quite a large portfolio of properties and am beginning to feel concerned about the impact Inheritance Tax on my estate. Have you a few simple pointers that you can share?
Dear Concerned Investor
The most important thing you need to do regardless of the size of your estate is go and have a professional will drafted by an expert who can advise you on the best way forward.
It’s also worth speaking to a financial planner as they will be able to advise you with respect to holding assets in trusts, which can also help you avoid paying too much Inheritance Tax.
Dying without a properly drafted will in place could land your family with a large and unexpected bill, not to mention the fact that those who benefit may not be your intended beneficiaries.
Inheritance Tax is currently levied at a rate of 40% on the value of an estate above the tax-free threshold, which has been frozen at £325,000 per person since 2009.
Married couples and civil partners are entitled to double the allowance, passing on assets to their children or other relations worth up to £650,000 before a tax charge is triggered.
However following an announcement in the 2015 Budget the Government will add a family home allowance worth £175,000 per person to the existing £325,000 tax free allowance from April 6, 2017.
This means individuals can pass on assets worth up to £500,000, including a home, without paying any Inheritance Tax at all.
For married couples and civil partners, the total is £1million.
Dawn Sandoval is the owner of Dawn Sandoval Residential in Canary Wharf .