Estate and Inheritance Tax Planning

The Financial Conduct Authority (FCA) does not provide regulation for advice on Estate Planning or Inheritance Tax Planning.

Inheritance Tax Rules from 6 April 2017

Starting 6 April 2017, the Inheritance Tax rules introduced an additional “family home” allowance, known as the residence nil rate band (RNRB). This extra threshold applies when an individual’s estate includes a qualifying property. In the 2023/24 tax year, the standard Inheritance Tax threshold remains at £325,000, and the RNRB also stays at £175,000. This means individuals can pass on assets, including the family home, worth up to £500,000 to children or grandchildren without incurring Inheritance Tax.

Lifetime Gifts and Exemptions

For the 2023/24 tax year, the annual gift exemption is £3,000. If you can afford it, consider making a gift of this amount. If you didn’t use any part of the £3,000 exemption in the 2022/23 tax year, you can carry it forward to 2023/24. But remember, this can only be carried forward for one year.

Potentially Exempt Transfers (PETs) allow for unlimited gifts. If you live for 7 years after making the gift, it won’t have any Inheritance Tax implications.

When making gifts by cheque, ensure they clear before 5th April to count towards the current year’s total.

You can also make tax-free gifts of £250 to any number of individuals. Additionally, varying amounts can be gifted between family members during a wedding or civil partnership ceremony without attracting Inheritance Tax.

Tax Advice and FCA Regulation

Note that tax advice without an investment element does not fall under FCA regulation.

Taxation levels and reliefs depend on current legislation and individual circumstances. These are not guaranteed and may change over time.