Inheritance Tax

Provided by Skipton Building Society

  • Find out if the beneficiaries of your estate may have to pay inheritance tax
  • Financial advice to reduce or eliminate your liability
  • Help protecting your loved one from a 40% tax bill
  • Ongoing support from our dedicated team
  • Advisers who can meet you at a convenient location

Call free on 0800 085 0266* or

Not ready yet? Get our FREE Guide to Inheritance Tax

Some areas of Inheritance Tax (IHT) Planning are not regulated by the Financial Conduct Authority. Some IHT planning solutions may put your capital at risk so you may get back less than you originally invested. IHT thresholds depend on your individual circumstances and prevailing legislation, both of which may change in the future.

We all want to do the best for our loved ones. Yet when it comes to leaving your inheritance, you could find the taxman is at the front of the queue, poised to take a large part of your estate. By putting plans in place now, you can make sure the people who matter in your life inherit what you want them to have – and don’t receive an unexpected tax shock.

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Inheritance Tax (IHT) is paid upon a person’s death if their estate exceeds their IHT threshold.

When you die, HMRC will calculate the value of your possessions (known as your estate) to see if it falls within the nil rate band. Your estate is made up of everything you own – your property, car, jewellery, savings and investments (minus any liabilities, such as an outstanding mortgage). If it totals more than the nil rate band, everything above it will be taxed at 40pc (although this reduces to 36pc if you gift more than 10pc of your net estate to charity).

If you are single or divorced, the nil rate band is £325,000. If you’re a married couple or widowed, it’s up to £650,000. The government has announced the gradual addition of a main residence nil rate band from April 2017, which by 2020 will be worth up to £175,000 per person. This new rule will reduce how many families face a bill; but many will find it is of little or no help.

In most cases, it will fall upon your loved ones to pay an inheritance tax bill within six months (after which HMRC will charge interest) – and, in most cases, it needs to be settled before they can inherit what you want them to have. In other words, they could have to find the money to pay the bill at relatively short notice.

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Contrary to popular belief, Inheritance Tax (IHT) not only affects the very rich, but increasing estate valuations mean that many other people could be affected without realising.

The Office for Budget Responsibility has forecasted that the number of family estates on which inheritance tax must be paid has grown, from around 15,000 in 2009/10 to more than 40,000 last year (2015/16). This represents the largest number of families paying inheritance tax since 1979/80.

From April 2017, HMRC is gradually introducing an additional new ‘main residence nil rate band’, which will be worth £175,000 per person by 2020. There will be a number of restrictions over how this allowance can be used. The Office for Budget Responsibility still forecast increase in families paying inheritance tax after this introduction.

You may be able to reduce, and even eliminate, your IHT liability by undertaking careful planning with an expert. Fortunately, Oour long-standing partner Skipton Financial Advisers are the part of Skipton Building Society that offers financial advice. Skipton can help determine whether you could be affected by IHT and provide recommendations tailored to you.

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Our professional, personalised advice will help you to manage your Inheritance Tax liability.

Skipton offers an Inheritance Tax Review Service, which includes helping you to determine if you have any existing or potential liability. Combining this with our Legacy Planning services we can help you put plans in place so your wishes for your family can be carried out tax-efficiently.

Through the Inheritance Tax Review Service, Skipton’s expert financial advisers can offer you advice on the different ways to address this issue. You may then be able to take steps to reduce, or even eliminate, your inheritance tax liability.

They can discuss with you the ways in which you could leave your legacy to your loved ones in the most tax-efficient way possible, and advisers can also offer you financial advice, in order to help you to plan for retirement.

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There is no charge to pay for an initial review of your finances – or to hear their recommendations.

If you decide to act upon their advice, there will be an Initial Advice Charge to pay. The amount very much depends on how much you invest and your individual circumstances, but will be no more than 4.5% of the value of your investment (if investing a lump sum).

If you decide to take advantage of their ongoing service, there will be an annual Ongoing Charge of 0.72% for investments and 0.5% for pensions of the value of your funds. Please note, not all inheritance tax solutions will an ongoing service option.

There will be no surprises. The charge amount will be outlined to you before making a final decision – you will never have to commit to paying a charge that isn’t first explained to you.

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The decision to invest was an easy one for me as it all made sense. I did not feel rushed, and had enough time to think it through, and talk with friends. All aspects were very easily explained and the adviser made the whole process pleasant and not patronising. Anything that saves my son IHT is a benefit. At no time did I consider Lloyd as a sales person – not at all pushy.

Maureen Noden, West Midlands

I have been very impressed with the service we received at the Skipton. Matthew, our adviser, has been excellent and very understanding of our situation.

Karen Buckley, Sussex

The experience was very professional, not at all embarrassing and we came out, as before, relieved that we were doing something positive about our future plans, rather than just hoping for the best.

K Cottam, Rochdale

  • The main residence nil rate band will be gradually introduced from April 2017, in addition to your existing threshold. The initial allowance will be £100,000 in 2017/18, then it is raised to £125,000 in 2018-19 and £150,000 in 2019-20, before reaching the final amount of £175,000 in 2020-21. After this the allowance will increase with inflation. This new allowance will only apply if you want to pass your main residence to a direct descendant like a child or grandchild, therefore not everyone will be able to take advantage of this additional allowance. If you have multiple properties, only your main home can qualify from this allowance. When added to your existing threshold, this could potentially give you an overall allowance of £500,000 if you are single or divorced, or £1 million if you are a married couple or in a civil partnership.

  • Yes. Since new provisions were introduced by the Finance Act 2008, survivors of a marriage or civil partnership have been able to claim their spouse’s unused nil rate band on their death.

    It is not dependant on the size of your spouse’s estate upon their death, and whether they are even liable to IHT. The only relevant factor is how much of the available nil rate band has been utilised by your spouse upon their death.

  • If you put off making plans for a number of years, your options could potentially be reduced and costs could be increased. For example, a gift made to a beneficiary could potentially reduce or eliminate your IHT bill. However, you have to survive seven years for this to take full effect.

    If you die within this period, the IHT liability still exists; however, the charge on the gift is gradually reduced on a sliding scale over the seven year timeframe – this is known as Taper Relief. For example, if you die in-between years three and four 80pc of the tax on that gift will be due, and if you die between the final six and seven years it will be reduced to 20pc of the tax due on that gift.

  • Certain transfers are automatically exempt from IHT, depending on who the beneficiaries are. They include transfers between married couples or civil partners, UK registered charities, qualifying political parties and various national institutions such as The National Trust, national museums and universities.

    There are also gifts exempt from IHT, which include small gifts – up to the value of £250 in any one tax year – that can be given away to as many people as you wish. An amount of £3,000 is annually exempt each tax year, which can be carried over to the following tax year and subsequently you could have a maximum of £6,000 in one tax year. An exempt gift can also be made in consideration of a wedding – £5,000 to a child, £2,500 to a grandchild or great grandchild and £1,000 to anyone else.

  • Upon your death, a personal representative will be appointed, often your beneficiaries, may be left with an Inheritance Tax bill that must be paid before receiving the remainder of your estate. The liability must be paid within approximately six months from the date of your death, and failure to settle the bill will result in interest being charged by HM Revenue & Customs. Once the liability has been paid, your personal representatives will receive a Grant of Probate which will allow them to legally access the rest of your assets.

Call free on 0800 085 0266* or

Not ready yet? Get our FREE Guide to Inheritance Tax

The Telegraph recognises that many readers are potentially affected by inheritance tax (IHT), which is why we are offering a service to help people make plans provided by our partners, Skipton Building Society. Since the Telegraph launched this partnership in 2004, thousands of readers have taken advantage of the service to have their savings and investments reviewed by an expert. With fully qualified financial advisers based nationwide, Skipton Building Society offers face-to-face, personalised financial advice to help mitigate or even eliminate your IHT liability.

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Not ready yet? Get our FREE Guide to Inheritance Tax

Some areas of Inheritance Tax (IHT) Planning are not regulated by the Financial Conduct Authority. Some IHT planning solutions may put your capital at risk so you may get back less than you originally invested. IHT thresholds depend on your individual circumstances and prevailing legislation, both of which and may change in the future.

Telegraph Inheritance Tax Advice is provided by Skipton Building Society. Skipton Building Society is a member of the Building Societies Association. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, under registration number 153706, for accepting deposits, advising on and arranging mortgages and providing Restricted financial advice. Principal Office, The Bailey, Skipton, North Yorkshire BD23 1DN. Telegraph Media Group Limited is an introducer appointed representative of Skipton Building Society. Should you take advice from Skipton Building Society, the Telegraph will receive a fee for the introduction.

*To help maintain service and quality, some calls may be recorded and monitored. Calls are free from a BT landline, costs from other networks and mobiles may vary. Telegraph Inheritance Tax Advice is provided by Skipton Building Society who may introduce you to Bellpenny who offer a Restricted advice service. Bellpenny is a trading style of Capital Professional Limited, which is authorised and regulated by the Financial Conduct Authority – registration number 578614. Registered in England and Wales No: 07584487. Registered Office: 6th Floor Reading Bridge House, George Street, Reading, Berkshire RG1 8LS. Should you take advice from Skipton Building Society or Bellpenny, the Telegraph will receive a fee for the introduction.

Category: Financial services

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