Taking the stress out of IHT and probate
We’re currently seeing a considerable delay in issuing grants of probate which is causing stress for the executors and beneficiaries of estates. There’s also added stress around the ability to fund inheritance tax payments and the best way this can be achieved. Recent reports suggest that 36% of us will inherit a property during our lifetime but many beneficiaries aren’t clear about what steps they need to take when a loved one dies.
It’s often an emotionally charged time and we completely understand that the last thing people want is to have to get their heads around the ins and outs of inheritance tax and probate. We’ll try and simplify some points here to give you a heads up for when you find yourself in the position of dealing with a loved one’s estate.
When does inheritance tax (IHT) apply?
After someone dies, if the value of their estate exceeds £325,000, IHT at 40% may apply. Estates left to spouses don’t attract IHT on first death and there are other reliefs available which can reduce inheritance tax such as the residency nil rate band where you pass your main property to direct descendents.
Who sorts out the estate finances?
The executors are responsible for sorting out the finances of the estate and ultimately handing over any remaining assets to the beneficiaries. This process is called probate and begins after death. Often, it helps to appoint a probate-qualified professional to ease this process but it can be done without the guidance of a professional.
What can be done to reduce exposure to IHT?
There are a number of options and reliefs available to minimise IHT. More estates are hitting the IHT threshold as house prices continue to rise but with a willingness to take action early, taxes can be reduced.
The advantages of appointing a probate-qualified accountant
We’re regularly involved with our clients’ financial affairs and understand not only the assets in the estate but also the history of the deceased estate. The probate process involves HMRC returns, valuations and often complex calculations which we’re well placed to help with.
To reduce your exposure to inheritance tax or understand what steps you can take to become even more tax efficient, please contact [email protected] or call 01527 558539. More info on our probate services can be found here.