Q: As I am getting older, I have started worrying about what will happen to my assets when I die. I have a Will, but it was made several years ago and of course the value of everything has gone up so much since I made it. I own my own home and I also have £150,000 in savings. Will my adult children receive the full amount, or will they have to pay tax?
A: As it stands currently, your estate will have an inheritance tax threshold of £325,000 available to it when you pass away. In addition, you can apply residential nil rate band relief to your main residence up to the value of £175,000 if you are passing your main residence down to your ‘lineal descendants’.
This means that, depending on the value of your main residence, you could potentially pass an estate worth £500,000 to your children. If you have a spouse who has died before you, then you may also be able to claim some, if not all of their unused nil rate bands in addition to your own.
You will also need to consider if you have made any gifts out of your estate in the 7-year period prior to your death. Such a gift is referred to as a potentially exempt transfer. If you die seven years clear of making such a gift, then its value will fall outside of your estate for inheritance tax purposes. However, if you die within seven years of making such a gift, then its value will be added to the value of your estate for the purposes of calculating inheritance tax.
This matter clearly requires a lot of thought, and your solicitor will be able to help you with Will and tax planning, taking into account your personal circumstances.
This question has been answered by Victoria Wilson, a Partner with GHP Legal. If you would like to speak to someone about this or any other legal matter it is still possible, and we are doing everything we can to ensure that we continue to offer our high levels of service to our clients. Where possible, we ask that you communicate with us by phone or email. If you have a new enquiry or for an appointment visit www.ghplegal.com or contact one of our offices: Wrexham 01978 291456, Llangollen 01978 860313, Oswestry 01691 659194
