Whether you are looking to invest for the first time, or have an investment portfolio already, if you don’t know where to begin, or know exactly what you are looking for, we can help. Contact your local Investec experts in Leeds today, to discover how we can help you to fulfil your financial goals, and live life the way you want to.
19 Oct 2020
Inheritance tax solutions
How to minimise inheritance tax due on your estate.
One of the most common queries we receive at Investec, Leeds is how to reduce the potential Inheritance Tax (IHT) charge on a client’s estate, allowing them to pass more of their wealth to their loved ones.
There are several options available. Some solutions will reduce your potential charge immediately while others can take a number of years to no longer be deemed part of your estate for inheritance tax purposes, as we’ll describe below.
You can give away gifts worth up to £3,000 in total in each tax year and these gifts will be exempt from IHT when you die.
Wedding/civil partnership ceremony gifts
Up to a certain limit, gifts received at a wedding or civil partnership ceremony are exempt from IHT when the giver dies.
Parents can each give cash or gifts worth up to £5,000, grandparents and great grandparents can each give cash or gifts worth up to £2,500, and other individuals can give cash or gifts worth up to £1,000.
Potentially exempt gifts
Any gifts you make to individuals will be exempt from IHT as long as you live for seven years after making the gift. These are known as 'potentially exempt transfers' (PETs).
However, if you die within seven years and the total value of gifts you made is less than the IHT threshold, then the value of the gifts is added to your estate and any tax due is paid out of the estate.
These are investments in certain types of unquoted companies to encourage investment in these specific areas. Once these assets have been held for two years then they may be eligible for IHT relief provided they continue to qualify and are held at the date of death.
Our team of experts would be more than happy to assist you with looking at the most suitable options for your personal circumstances. Please contact us should you wish to discuss this area in more detail.