family with inheritance tax planExceptionally high levels of stamp duty are reported to be discouraging house sales and in particular discouraging older people from downsizing. Stamp duty on the sale of a £2 million home will amount to £153,750 and on a £600,000 home to £20,000. The government is also benefitting from increased receipts from inheritance tax (IHT) which result from older people hanging onto their high-value homes.

It is now estimated that residential property accounts for one-third of the typical estate on which inheritance tax is payable.

What is stamp duty?

Stamp duty land tax in England and Northern Ireland is a lump-sum tax that anyone buying a property or land costing more than a set amount has to pay. This set amount is currently (2019/2020) £125,000, or £40,000 for second homes, but often changes when there is a budget. So, for first-time buyers, this allowance increases from £125,000 to £300,000. If you are buying property in Scotland or Wales the rules are different.

The tax applies to both freehold and leasehold properties. It makes no difference if you are buying outright or with a mortgage.

Make use of your IHT nil rate band allowance.

We can all make use of our nil-rate band if the value of your estate is worth less than the nil-rate band, inheritance tax would not be payable. Your estate is made up of the assets that you own such as-

  • Property
  • Savings
  • Investments
  • Vehicles
  • Interest in a business
  • Life insurance death benefits
  • Retirement plans and pensions

Also, the nil-rate band tends to change with each Budget. For the tax year 2019/2020, the nil-rate band is £325,000 or £650,000 jointly. If your estate is worth more than the nil-rate band your executor may be liable to pay tax on anything above this threshold. The current standard inheritance tax rate is 40% based on the 2019/2020 tax year. This can be reduced to 36% if you leave at least 10% of your estate to charity. You may also be able to claim “main residence” allowance on your home.

How Anstee & Co can help you save paying inheritance tax.

We are a firm of Independent Financial Advisers (IFA’s). This means that our Financial Planners offer you unbiased advice. We will consider all the financial solutions available to you. Remember, it is important that you should maintain your financial security in old age. You have earned the money so do not sacrifice everything just to plan for someone else’s future.

With sound financial planning, inheritance tax can be reduced significantly. The key element of any inheritance tax planning is time. The sooner you start planning, the easier the plan becomes. The key areas that we look at are-

  • Wills
  • Exemptions
  • Gifts
  • Trusts

You can read more about these areas on our website. Alternatively, why not arrange a meeting. The initial “Getting to know you” meeting is at our expense and is without obligation. Meetings can be at a time and location that is convenient for you.  Our offices are located at-call back logo for inheritance tax planning

  • Kettering, Northamptonshire
  • Stamford, Lincolnshire
  • London, Pall Mall, Greater London

Also, our financial planners live and make use of meeting rooms in-

  • Bedford, Bedfordshire
  • Market Harborough, Leicestershire
  • Northampton, Wellingborough, Brackley and Towcester in Northamptonshire

Why not contact us today to see how we can help you?

Finally, the information contained in this article is for information purposes only and does not constitute advice. No action should be taken based on this information alone.