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INTRODUCTION TO INHERITANCE ADVICE FROM RAE FINANCIAL ADVISORY SERVICES LTD
Passing on your legacy or receiving an inheritance can be a transformative event, providing you with unexpected wealth but also new financial responsibilities.
Please note that you work and pay income tax on your hard-earned income. You save and you pay tax on your savings. You die and you still pay 40% inheritance tax on your wealth if above £1m as it stands currently.
Managing an inheritance wisely requires careful planning and informed decision-making, and many people choose to seek out inheritance advice from a chartered financial advisor. This is because the house prices increase, the freeze on the Nil Rate Band NRB of £325,000, and the limitation on the Residential Nil Rate Band RNRB.
WHAT IS INHERITANCE TAX (IHT)
The government levies tax on the value of a person's estate if their estate is worth more than the Nil Rate Band. The IHT Nil Rate Band (NRB) is currently £325,000, and many people are still getting caught in the trap of property inheritance tax as the threshold has not kept pace with the inflation of property prices, which is affecting more and more people.
There is also an additional 'main residence' allowance ('Residential Nil Rate Band' (RNRB)) which applies if a person's home is given to their children (including adopted, foster, or stepchildren), surviving husband or wife, or grandchildren. This is set at £175,000 and is added to the IHT threshold, providing a total allowance of £500,000.
When a relative dies and leaves an estate worth more than £325,000 or £500,000 if the 'main residence' allowance applies, families are required to pay tax on the amount above the NRB (and RNRB if applicable) within six months. After that, they are charged interest at a rate. However, there are ways to lessen the burden of property IHT.
When you die, you would likely wish to leave as much as possible for your loved ones. Unfortunately, this is often not as simple as you might expect. HM Revenue and Customs (HMRC) will apply a 40% tax to the value of your estate over and above that of the NRB (and RNRB) that applies at the time of death.
No IHT is applicable on 'inter-spousal transfers' (money/property/assets that are bequeathed by one spouse (or civil partner) to the other.
Your estate could include more than you originally realise. It is often easy to dismiss IHT as something that may not affect you, as your property may not be over, or much over, the IHT threshold. However, with all your other assets, such as investments, life cover, bank accounts, and potentially your pension, as well as physical property such as cars, furniture, and family heirlooms, many estates are considerably over the threshold without the individuals being aware of it.
For assets passed between spouses and civil partners, the nil rate band allowance will be passed along with the assets. This gives a couple available allowances (nil rate bands) of up to £650,000, which increases to £1,000,000 with the addition of the 'main residence' allowance detailed above.
HOW RAE FINANCIAL ADVISORY SERVICES LTD CAN HELP
An inheritance can consist of various assets, including cash, investments, property, and more. Each asset comes with its own set of considerations, from tax implications to investment strategies. RAE Financial Advisory Services Ltd can help you understand the full scope of your inheritance and develop a tailored plan to manage it effectively.
HOW CAN WE HELP YOU MAKE THE MOST OF YOUR INHERITANCE
We Will Have A Comprehensive Financial Review With You
RAE Financial Advisory Services Ltd will work with you to create a detailed inheritance and estate planning strategy that considers your current financial situation, your goals, and your aspirations. This plan will help you manage your inheritance effectively and make informed financial decisions.
Tax Planning And Optimisation
Inheritance tax planning is a crucial and complex area that requires expert guidance. RAE Financial Advisory Services Ltd can help you navigate this complex tax landscape, and the tax implications of your inheritance, and identify strategies to minimise your tax liabilities. We will ensure that your wealth is protected and that you are making the most of the tax-efficient investment options available to you. We can also provide guidance on how to use tax-efficient investment vehicles to maximise your wealth.
Investment Management
Managing a significant inheritance requires careful investment management strategies. RAE Financial Advisory Services Ltd can help you develop a smart investment strategy that aligns with your risk tolerance and financial goals.
We will provide expert advice on how to invest your inheritance for long-term growth, helping you to diversify your investments, minimise risks and maximise returns.
We will monitor your investments and make adjustments as needed to ensure that your wealth continues to grow outside your estate.
INHERITANCE ADVICE FAQ
DISCLAIMER
Information is Based on Our Current Understanding of Taxation Legislation and Regulations.
Any Levels and Bases of, and Reliefs From Taxation Are Subject to Change.
The Financial Conduct Authority Does Not Regulate all of the Estate planning and Trust Advice.
The Financial Conduct Authority Does Not Regulate Some Forms of Taxation.
Tax Treatment is Based on Individual Circumstances and May Be Subject to Change in the Future.
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