Inheritance Tax planning
Who pays IHT?
Increasing wealth in England, caused partly by particularly huge price increases in the housing market, and the fact that IHT allowances have not kept pace with these increases. At the same time fewer people are actually doing anything about IHT. There is a common misconception that costs of Solicitors Fees means that Estate Planning is just not worth it, this is not correct, Estate Planning is readily available and can save your loved ones hundreds of thousands of pounds.
Who pays the inheritance tax on an estate?
The 'personal representative' (the person nominated to handle the affairs of the deceased person) arranges to value the estate and pay any Inheritance Tax that is due. You usually nominate the personal representative in your will (you can nominate more than one), in which case they are known as the 'executor'. If you die without leaving a will a court can nominate the personal representative, in which case they are known as the 'administrator'. The assets within the deceased’s estate ARE NOT accessible until the inheritance tax liability on the estate has been paid. This can cause major problems for your beneficiaries
When must the inheritance tax be paid?
In most cases, Inheritance Tax must be paid within six months from the end of the month in which the death occurs, otherwise interest is charged on the amount owing. Tax on some assets, including land and buildings, can be deferred and paid in instalments over 10 years.
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The FSA does not regulate will writing or some forms of tax planning.
James Fernley & Partners (Life & Pensions) is authorised and regulated by the Financial Services Authority (http://www.fsa.gov.uk/register/home.do). FSA Registration No: 121092