News
Inheritance Tax and Spouse Transferrable allowances
25.03.2011
Many older couples and widows and widowers are worried about Inheritance Tax-in some cases quite unneccessarily. Since October 2007 if the first spouse to die has not used their Nil Rate Band then usually it can be used to reduce or eliminate the tax otherwise payable when the survivor passes away. There are exceptions and it does make sense to take advice from an expert in this area.
Recently we have acted for a number of estates where the husband died many years ago and more recently the widow has died.To the surprise of many there has been an allowance of £650,000 -rather than £ 325,000 -to deduct from the net assets before paying Inheritance Tax. In two cases which we have dealt with :that has completely wiped out ANY liability to Inheritance Tax, much to the delight of the beneficiaries.
Many older people feel under pressure to make gifts in their lifetime simply through the fear of Inheritance tax, but where the gifts are perhaps not entirely wise. The rules regarding gifts are quite complicated and anyone considering making substantial gifts should seek advice first-particularly where there is concern that the beneficiary might be in an unhappy marriage or is in severe financial difficulties already.
If a surviving husband or wife remarries it is important that their will is properly structured to ensure that any transferrable Inheritance Tax allowance from their late spouse is not lost.We can help with this.In any case: if you marry again your earlier will is automatically revoked so a new one will need drawing up.
We can provide sensible solutions and ideas to ensure that money intended for your own children reaches them,and is not lost as a result of them subsequently divorcing or being faced with bankruptcy, while still making proper provision for your new husband or wife.
For more information please contact HILARY HUGHES on 01435 890101.
