How to Leave up to £1 Million to Your Loved Ones Tax Free – Part 1

Inheritance Tax

Inheritance Tax (IHT), a daunting pair of words for most people and often accompanied by worries of it being complicated or a way for people to sneak tax-free under the radar… Well, today is the first part of how we can prove this is not the case and that this is how the government intends you to make the most of your tax-free allowance!

Although inheritance tax is the most reviled tax, the dreaded 40% that everyone has heard so much about may not actually come into effect at all on your assets, depending on how you plan for Inheritance Tax. You could even manage to completely avoid paying a penny of it, as intended; no sneaky schemes or shady money management, HMRC has thought about this!

Nil-Rate Band

The “Nil-Rate Band” (NRB) for IHT very much does what it says on the tin!  This is a financial band (amount) that has a Nil Tax Rate; everyone, even you, has this! So, when you leave your assets, which could be anything from your savings accounts, jewellery, cars, and properties*, the government allows you a tax-free allowance of £325,000 as of 2022 so far.

So, if you only have assets of £300,000 in total, everything below that £325,000 threshold can pass as you please, free of any IHT! Though anything over that threshold will likely be taxed at the dreaded 40%.

Personal Tax Allowance

However, this is if you are a sole person. IHT has a strange preference to married couples/civil partners, these groups do get a special treatment when it comes to how NRBs interact. As we have just learned, each person gets £325,000 as their personal allowance; it is worth noting that if you are an unmarried couple, your personal allowance is used up by passing your assets to your partner.

Married / Civil Partnership

If you’re married/civil partnered, when the first member of the couple passes away, their NRB (the £325k) doesn’t get used up or disappear… the amount of tax-free allowance that is left considered unused and could be transferred to the surviving spouse!

Spousal Exemption

Let’s say for example, the husband dies, and he passes everything to his wife (my apologies for the nuclear family example) – firstly, there is the “spousal exemption” so all assets and monies passing to your spouse/partner are automatically free of tax!  So, this means that the Husband’s NRB (£325k) of tax-free allowance was never used…

Instead, the surviving wife (or any spouse) combines their NRB with their deceased partner’s giving them a total of £650,000 of tax-free allowance to give to friends and family in their Will.

Looking for more information on Inheritance Tax?

Head over to the Society of Will Writers to read the full article – How to Leave up to £1 Million to Your Loved Ones Tax Free, a Two-part Guide – The Society of Will Writers

Contact Will Trust and Protect:

Vitality – A Protection Policy for Your Family

Vitality Family ProtectionA protection policy you can benefit from even if you don’t make a claim

Will Trust and Protect, in association with PruProtect, offer a Protection Policy for Your Family to give you more options to choose from, so you can protect the things that mean most to you – from children’s serious illness cover to income protection, ensuring your family are cared for in time of need. It means you can tailor your plan to suit you. As part of PruProtect’s plans, you can get access to Vitality, their unique healthy living programme which gives you more than just cover and is designed to help you to live life well and could save you money at the same time.

It gives you discounts on things that are good for you
There are discounts on things like health screenings, stop smoking sessions and fitness equipment such as heart rate monitors and sports shoes.

It covers you for up to 166 serious illnesses
…rather than the industry standard of just 40.

You could even reduce your premiums
If you take out a PruProtect plan, which is a protection policy for your family, you get something you can’t get from other insurance providers – discounts on your protection premiums over the course of your plan by engaging with Vitality2.

Extra discounts and rewards with Vitality Plus
You could enjoy a free cinema ticket every week to use at Cineworld and Vue cinemas across the country, up to 50% off a bike at Evans Cycles, up to £15 cash back every month on mobile phone contracts, a third off theatre tickets and days out, discounts on holidays and up to 50% off flexible monthly gym membership at Virgin Active or LA fitness and more.

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For further information about Vitality and the great offers you can get, please click here.

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Call us today for more information on  0845 257 9827

Vitality is not available with the Relevant Life Policy.   Premium discounts are not available with the Essentials Plan or Business Protection Plan. Premiums are not reduced for Health Cover, Vitality Plus or the Essentials Plan.   If your premiums are £25 a month or more, you can add Vitality Plus to your plan for £6.80 a month.  A one off activation fee of £80 per person is payable to PruProtect to unlock the gym benefit. Plus any additional joining fee charged by the individual gym, usually up to £55 per person, but could be as much as £150 for some Virgin Active Classic Clubs. We are unable to offer discounts on Virgin Active memberships at Clements Hall, Rayleigh and Chiswick Riverside clubs.

Monthly Newsletter

Check out our latest Newsletter!

It’s a great read, here are some of the things we cover in this issue…

 

-Aretha Franklin – The Queen of Soul leaves her estate to the rules of intestacy.

-What does being named as an Executor mean?

-What happens to property when someone dies?

-The risks that come from DIY Wills.

 

Latest Newsletter – Click Here to Read Full Article!