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This website contains information which may or may not be applicableto your own situation and circumstances.

Any information or advice on this site does not constitute a personal recommendation. If you have any doubts as to whether a product or service is suitable for you, please seek independent advice.

Inheritance Tax Advice

Inheritance Tax (IHT) rules changed again in October 2007, which we and our clients welcomed; the Chancellor has allowed spouses and civil partners to utilise unused allowances from the death of the first partner in the planning for (and at the time of) the second death. The rules are extremely complex and you should contact us for further information on this aspect, especially if you are already a widow / widower who may benefit from this.

The tax system is fiendishly complicated: it is no wonder there is an army of tax experts trying to pick holes in it on behalf of their clients.

There are said to be only two certainties in life - death and taxes.

FACTUALITY:Inheritance Tax is levied currently on any individuals who are not making an inter-spousal transfer between UK Domiciled individuals. The first band of IHT in the 2008-09 tax year is taxed at 0% (Nil Rate Band). All transfers above the Nil Rate Band are taxed at 40%.

FACTUALITY:The Nil Rate Band is £312,000 (2008-09), with it due to go to £325,000 the year after.

FACTOID: Inheritance Tax is the only legally avoidable tax for both business and also individuals. With careful financial planning, most people can make this tax liability zero.

IHT is paid by your executors, the people who manage your will after your death. probate cannot be granted until the inheritance tax bill has been settled.

FACTUALITY:A recent deal by the Revenue and Customs means bereaved relatives will be spared taking out costly loans to pay tax. Under the new agreement, banks (for example) will release money directly from the deceased estates before probate.

Liability to UK Inheritance Tax: There are three different categories to consider:

• Are you both Resident and Domiciled in the UK?
• Are you Domiciled but no longer resident in the UK?
• Are you just Resident in the UK, but Domiciled somewhere else?

There is a fourth category, where you live outside the UK and are not Domiciled here, but you have assets in the UK. We do not advise on this category as it would largely be dictated by your country of residence rules rather than UK rules.

Take action today: It is possible to plan ahead to either cover the cost of the tax or reduce the amount to be paid. There are many lifetime allowances and gift exemptions that can be utilised by an individual. There are also a range of ways in which to mitigate or reduce any tax liability, although the Exchequer is continually cutting back on methods that specialists like ourselves utilise.

Even if you have an existing arrangement you should certainly consider reviewing it in light of the many changes over recent years.

THE BIG QUESTION IS HOW DO I AVOID IHT ON MY DEATH?

The answer to this question varies from person to person, depending on how much ‘control’ they are prepared to give up of their assets.

AisaProfessional, our face to face adviser side, has a wealth of experience in advising on these matters, with nearly all our clients seeking this service. We can almost certainly assist you if you are prepared to consider a proper plan. You must know that there is no such thing as a "no compromise" solution, in life one does not get something for nothing. If you receive advice to the contrary you would be advised to get a second opinion.

The key is that no firm has greater recent experience of dealing with these matters and our advice is fully current taking into account the Royal Assent of the Finance Bill 2006 in July 2006, the Finance Act 2007 and current HMRC methods, including the latest Budget announcements.