Inheritance Tax Planning

Our team of Private Client Lawyers are experienced in advising on succession and tax planning.

At Herrington Carmichael we receive many questions relating to the legal process on tax and inheritance – after years of property market growth, we are seeing more cases of clients who want to gain an understanding of the Inheritance Tax Reliefs and Exemptions with a little advice on income and capital gains tax.

Inheritance Tax Planning

Currently an individual has an Inheritance Tax free sum (known as the Nil Rate Band) of £325,000, and the value of their net Estate above this sum may be subject to Inheritance Tax at a rate of 40%.

For individuals who are married or in a Civil Partnership, they can benefit from the spouse exemption, which means that they can transfer assets between each other during their joint lives, or upon their respective deaths, without any Inheritance Tax implications. 

Under current legislation there is also the concept of the Transferable Nil Rate Band. This means that if the first spouse or Civil Partner to die leave their Estate to the survivor of them, then any remaining Nil Rate Band can be transferred to the surviving individual’s Estate upon their death. This means that if both spouses (or Civil Partners) die with full Nil Rate Bands the survivor’s Estate would then have a Nil Rate Band of £650,000.

In addition there is now also the Residence Nil Rate Band which an Estate may benefit from. The Residence Nil Rate Band is currently £175,000.  However, there are strict criteria for qualifying for the Residence Nil Rate Band, as you must leave your property or your Estate continuing your property to direct descendants (which include children, grandchildren and remoter issue, stepchildren and step grandchildren, adopted etc.)

Again, the Residence Nil Rate Band can be transferred to the Estate of the second spouse or Civil Partner to die in a similar way to the Nil Rate Band.

It should be noted that the Residence Nil Rate Band is tapered away at a rate of £1 for every £2 that the net Estate exceeds the £2 million threshold.  Therefore, currently Estates over £2.35 million (or £2.7 million where the Transferable Residence Nil Rate Band is successfully claimed) will not qualify for the Residence Nil Rate Band.

Income and Capital Gains Tax (CGT)

We are recognised specialists in inheritance tax in the UK. In addition, we do have considerable knowledge of income and capital gains tax and often advise on these.

Making a Will

We are able to advise on tax planning matters as part of our Will drafting service, at other times we will give separate advice.

Inheritance tax reliefs and exemptions

Take a look at our list of Inheritance Tax Reliefs and Exemptions and brief description of the principal reliefs and exemptions from Inheritance Tax. It is not an exhaustive list and should not be relied upon without first obtaining professional advice.

Contact us

Request a video call, phone call or a meeting in person with one of our inheritance tax planning experts...



    The reCAPTCHA verification period has expired. Please reload the page.

    A Brief Guide to Agricultural Property Relief

    Agricultural Property Relief (APR) is a Tax Planning mechanism available to farmers and landowners. It is designed to make the transfer of farming land on death less financially burdensome. It provides total or partial Inheritance Tax relief and is therefore a...

    What is a cross-border Estate?

    When an individual dies, their assets (e.g., properties, bank accounts, investments, stocks and shares, valuable personal possessions) and their liabilities (e.g., credit cards, utility bills, personal loans, mortgages, Income Tax) are calculated as at the date they...

    I am going to inherit some money…what do I do?

    If you are not sure what to do with inheritance, we have outlined some options available to you in this article. There are two potential situations. The first is you think that when your Mum Dad or Auntie dies, you will inherit. The second situation is that your Mum...

    Funeral Disputes and the rights to your body

    Rights to the body and funeral disputes are not uncommon. Disputes arise over concern about the final resting place of the deceased’s ashes or perhaps about a style of coffin. It is not surprising particularly if one considers the competing claims between different...

    What happens to digital assets when you die?

    Our increasing concern about security, privacy and protecting our identities online means that people are taking more care securing their digital assets, including making passwords more complex, not writing them down and changing them regularly. Whilst this is great...

    What do I do with an Inherited weapon?

    When someone dies, those that are left behind are left to organise their belongings in accordance with their wishes. This is the job that Personal Representatives undertake during the administration of the Estate. Less frequently though, when sorting through the...

    Unfairly left out of a Will?

    Under the Inheritance (Provision for Family and Dependants) Act 1975, a person may have a valid claim against an estate if they have been left out of a will. This note provides a brief explanation of who may claim, on what basis, and for how much award when they have...

    Autumn Budget 2021: How will it affect me as an individual?

    The Chancellor Rishi Sunak has now given his second Budget. Whilst many of us had feared what the Chancellor may say given the pressure on the pubic purse following the Covid 19 Pandemic, the reality was that there was minimal change for the individual with the Budget...

    Commonwealth Resealing – Is my Will legal in the UK?

    In order to prove an overseas Will in the UK it is generally necessary to prove that the Will complies with the internal law of the country in which the Will was made and or of the country in which the maker lived; this can sometimes prove to be more difficult task...

    Should I get married for tax reasons?

    Traditionally the emphatic answer to this question was NO. But in recent years we have seen the increase in the number of long-term relationships where there is no marriage or civil partnership, coupled with an increasing number of divorces and second relationship all...

    Private Wealth & Inheritance Team

    • All departments
    • Agricultural Law
    • Brexit
    • Careers
    • Co Co - Employee Share Schemes
    • Co Co - Recovery & Insolvency
    • Co Co - Restructuring
    • Co Co Corporate Governance
    • Co Co Corporate lending
    • Co Co Financial Services
    • Co Co Franchising
    • Co Co GDPR
    • Co Co in-house legal support
    • Co Co International Contracts
    • Co Co M&A's
    • Co Co MBOs & MBIs
    • Co Co Partnership and LLPs
    • Co Co Regulatory, Compliance & Competition
    • Co Co Shareholders Agreements
    • Co Co Terms and Conditions
    • Co Co- Intellectual Property
    • CoCo - Banking and Finance
    • CoCo - New Businsess
    • CoCo Competition Law
    • CoCo Consumer Law
    • CoCo Data Protection - Marketing
    • CoCo Data, IT & Technology
    • Commercial Law
    • Commercial Property
    • Construction
    • Corporate & Commercial
    • Corporate Law
    • Debt Recovery
    • Dispute Resolution
    • Disputes - Business
    • Disputes - Declarations of trust
    • Disputes - Probate and inheritance
    • Disputes - Professional negligence
    • Disputes - Restrictive Covenants
    • Disputes - Shareholders & Partnership
    • Disputes - Tenants in Residential Property
    • Disputes - Wills, trusts & probate disputes
    • Disputes and Small Claims
    • Disputes Construction
    • Disputes with Co-owners
    • Divorce
    • Employee - Termination
    • Employer - Termination
    • Employment
    • Employment - Business protection
    • Employment - Collective consultations
    • Employment - Contracts, services, consultancy
    • Employment - Employee benefits
    • Employment - Employee Procedures
    • Employment - Equality, discrimination and harassment
    • Employment - Family Friendly Rights
    • Employment - GDPR and Data Protection
    • Employment - Post employment obligations
    • Employment - Redundancy & Reorganisation
    • Employment - Settlement Agreements
    • Employment - Tribunal Claims
    • Employment - TUPE
    • Employment - Wages, holiday and sick pay
    • Employment - Workers rights
    • Employment Tribunal claims
    • Estate Administration
    • Expat Legal Services
    • Family Law
    • Financial Services
    • GDPR
    • Help to Buy
    • Immigration law
    • International Legal Services
    • Key Property Contacts
    • Land and Property Disputes
    • Land, development and construction
    • Lasting Powers of Attorney
    • Leasehold
    • Licensing Law
    • Money, Tax and Inheritance
    • New Build Conveyancing
    • Private Wealth and Inheritance
    • Professional Negligence
    • Property Finance
    • Property Law
    • Residential Property
    • Residential Property - Completions
    • Residential Property - Shared Ownership
    • Trainee Solicitor
    • Wills, Trusts & Probate

    Latest Insights

    Pricing Guides

    We are required by the Solicitors Regulation Authority to publish certain pricing information. Please contact us for an accurate fee proposal based on your particular facts and circumstances.

    Award winning legal advice

    Herrington Carmichael offers legal advice to UK and International businesses as well as individuals and families. Rated as a ‘Leading Firm 2024’ by the legal directory Legal 500 and listed in The Times ‘Best Law Firms 2023 & 2024’. Herrington Carmichael has offices in London, Farnborough, Reading, and Ascot.

    +44 (0)1276 686 222

    Email: info@herrington-carmichael.com

    Farnborough
    Brennan House, Farnborough Aerospace Centre Business Park, Farnborough, GU14 6XR

    Reading (Appointment only)
    The Abbey, Abbey Gardens, Abbey Street, Reading RG1 3BA

    Ascot (Appointment only)
    102, Berkshire House, 39-51 High Street, Ascot, Berkshire SL5 7HY

    London (Appointment only)
    60 St Martins Lane, Covent Garden, London WC2N 4JS

    Privacy Policy   |   Legal Notices, T&Cs, Complaints Resolution   |   Cookies  |   Client Feedback   |  Diversity Data

     

     

    Our Services

    Corporate Lawyers
    Commercial Lawyers
    Commercial Property Lawyers
    Conveyancing Solicitors
    Dispute Resolution Lawyers
    Divorce & Family Lawyers
    Employment Lawyers
    Immigration Law Services
    Private Wealth & Inheritance Lawyers
    Startups & New Business Lawyers

    Pay Online >

    Please be aware that we have no plans to change our bank details. If you receive any indication that any of our bank details have changed please contact us before sending us any funds. We take no responsibility for monies you transfer into the wrong bank account.

    © 2024 Herrington Carmichael LLP. Registered in England and Wales company number OC322293.

    Herrington Carmichael LLP is authorised and regulated by the Solicitors Regulation Authority with registration number 446245.