We’ve all paid tax during our lifetime; on income, our home, savings and interest. Nobody likes paying tax, and unfortunately, it doesn’t end when you pass away- inheritance tax may apply to your estate!
Many people wrongly believe that married couples and civil partners have an automatic combined inheritance tax-free threshold of £650,000 when it comes to their estate. This, however, is not the case, and is not as straightforward as it sounds.
Married couples and civil partners have the same tax allowance as single people- at present, this is £325,000.
If you have basic Wills- in which everything is left to one another in the Will- no tax will be paid upon the first death. Upon the death of the remaining partner, however, tax may become applicable to the remaining assets that make up your estate.
Careful planning is essential when trying to avoid or minimise Inheritance Tax. It is possible to benefit from the full threshold of £650,000 by proving any unused portion of the first partner’s allowance at the time they passed away. Therefore, planning will ensure you have the proof necessary to benefit from the full £650,000 threshold to give your estate the maximum amount of protection possible.
This may seem difficult to understand, but don’t worry; our legal experts are here to help. They can ensure your estate has the absolute best chance of being totally protected from unnecessary losses to care fees, Inheritance Tax and “unwanted others-” third parties that have some other claim to your estate.