Offering proactive advice to support your business, Dynamix are a modern incarnation of a traditional accountancy practice based in Canterbury.
Dynamix understand the transitions businesses go through – the start-up, the growing business, and the high-growth corporate business – and support their clients’ individual needs using highly experienced teams at the right times.
The resources section of Dynamix’s website www.dynamixgroup.co.uk is an invaluable source of information covering topics from inheritance tax to capital allowances, pensions to VAT and estate valuation to a savings calculator.
One such helpful article is on inheritance tax helping you to understand this complex process and put plans for the future in place as best you can.
Understanding Inheritance Tax
With the Inheritance Tax seven-year rule and many other exemptions available, it can be more important than ever to plan ahead to ensure your money goes to the people you want it to during our lifetime and when we die.
Dynamix, a modern incarnation of a traditional accountancy practice based in Canterbury, can help you to understand this complex process and put plans for the future in place as best you can.
Inheritance Tax – an overview
Inheritance Tax is levied on a person’s estate when they die and can also be payable during a person’s lifetime on certain trusts and gifts. The rate of Inheritance Tax payable is 40% on death and 20% on lifetime gifts. There is a nil rate band, currently £325,000, below which no Inheritance Tax is payable, and a new Main Residence Nil-rate Band which came into effect from 6 April 2017.
Potentially exempt transfers
Most gifts made during a person’s life are not subject to tax at the time of the gift. These lifetime transfers, known as ‘potentially exempt transfers’ or ‘PETs’, achieve their potential of becoming exempt if the taxpayer survives for more than seven years after making the gift. If the taxpayer dies within three years of making the gift, then the Inheritance Tax position is as if the gift was made on death. A tapered relief is available against the Inheritance Tax due if death occurs between three and seven years after the gift is made.
Making a will
Even if no Inheritance Tax is going to be due when you die it is important to write a will. If you do not do this you will die intestate and you will have no control as to who inherits your belongings. The rules of intestacy rarely operate how you might expect. They are especially unwelcome in many cases involving single people, married people with children and couples who live together but who are who are not married or in a civil partnership. Your will can also be used to arrange the transfer of your assets to keep the Inheritance Tax due on death to a minimum.
How we can help
We would welcome the opportunity to assist you in arranging a review of your affairs to identify the prospective Inheritance Tax payable on your estate at death. We can then discuss with you the steps that you could take to reduce this liability including utilising current exemptions which you may not be aware of.
Meg King ATT CTA, a member of the Chartered Institute of Taxation dealing with all aspects of Tax, says: “Many people want to make sure that their family and friends are taken care of financially after their death. Keeping the Inheritance Tax bill as low as possible can be one way to help.”