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Inheritance Tax and Estate Planning Advice in Norwich
Estate planning offers the opportunity to achieve substantial tax savings. Inheritance tax, levied at a rate of 40% on assets exceeding your nil rate band, can have a significant impact on your wealth transfer. Initiating the planning process on time ensures a more efficient distribution of your assets to your chosen beneficiaries. Various strategies are available to manage, mitigate, or even cut an inheritance tax liability. These include:
- Efficiently use assets for retirement income and pension transfers
- Consider life insurance to cover tax liabilities and protect your legacy
- Explore options like Business Relief for tax-efficient wealth preservation
- Making planned gifts can lower your taxable estate
What can I spend or give away?
Estate planning involves managing your finances and gifting, with the aim of ensuring your current and future financial well-being. Through cash flow modelling, we assess your financial needs, accounting for expenses like later-life care. Our goal is to help you enjoy life now while securing your future. Starting early, we can determine your financial requirements, devise effective asset transfer strategies, and address potential inheritance tax concerns.
Many people wish to maintain a degree of control over how their assets are used. Whether it’s directing funds for specific purposes like education, home buying, or ensuring that wealth remains within the family, our advice empowers you to ensure your assets go to the intended recipients for the reasons you have in mind.
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Charity and philanthropy
There are various ways to distribute your wealth to loved ones and causes close to your heart. These options include one-time cash gifts, providing regular income, or setting up trusts for long-term giving and maintaining future control. We’re here to discuss these alternatives with you and help you make the most suitable decisions, including utilising your annual gifting exemptions.
Estate planning with trusts
Trusts are invaluable tools in estate planning, serving a multitude of purposes. Many individuals opt to place gifts in trust, ensuring that the assets are accessible only at specific times or for specific purposes. Furthermore, life insurance policies can be established within a trust structure, allowing for immediate access to funds for the settlement of inheritance tax liabilities.
Inheritance tax FAQs
What is inheritance tax?
Inheritance tax, currently at 40%, applies to the portion of your estate surpassing the personal allowance. This is currently set at £325,000 per person. Your estate comprises property, savings, investments, and all other worldwide assets, including gifts made within the seven years preceding your passing.
Is inheritance tax always 40%?
Inheritance tax is commonly assessed at a rate of 40%, but it can be reduced to 36% if you choose to leave at least 10% of your estate to a charitable cause upon your passing.
What is the current nil rate band?
The nil rate band represents the inheritance tax-free allowance for individuals and stands at £325,000 per person. In the event of one person's passing, any remaining unused allowance can be transferred between married couples and civil partners.
What is the residence nil rate band?
The residence nil rate band, which applies to passing on the family home, currently stands at £175,000 and is transferable between married couples and civil partners. It decreases by £1 for every £2 over £2 million. This allowance is only applicable when passing a residence to 'direct' or 'lineal' descendants, such as children, grandchildren, or great-grandchildren. It applies solely to your primary residence, not buy-to-let properties.
What is taper relief?
Taper relief, also referred to as the seven-year rule, comes into play when you've made an exempt gift exceeding the nil rate band. It decreases the amount of inheritance tax applicable over the seven-year period following the gift.
Can passing on a pension reduce inheritance tax?
Pensions left unspent upon your passing don't factor into your estate, exempting them from inheritance tax calculations. Drawing income from other retirement sources can shrink your estate and, in turn, your future inheritance tax liability, all while allowing you to pass on your pension to beneficiaries without taxation.
Partner with Eastfield Accountants for expert CGT strategies
At Eastfield Accountants, we can offer advice and help with inheritance tax and estate planning strategies. Our expert guidance takes consideration of your individual circumstances, whether you’re navigating the complexities of personal assets or overseeing a business portfolio.
Get in touch with our team to help navigate your tax benefits.
Expert Inheritance Tax Advice with Eastfield Accountants
Strategy, Tax
Related services
See below for other related services we provide to fully support your financial needs.
- Capital Gains Tax Advice
- High Earner Tax Planning
- CIS Returns
- Self Assessment Tax Returns
- Landlord Accounting & Tax Returns
Strategy, Tax
Capital Gains Tax Advice
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Obtain valuable insights and expert guidance on Capital Gains Tax (CGT) with our dedicated advisory services. We offer comprehensive assessments and tailored advice to help you minimise tax liabilities and maximise your returns. Trust us to provide reliable and approachable CGT advice, ensuring you make informed financial decisions for optimal outcomes.
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High Earner Tax Planning
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Managing taxes as a high earner can be complex, but Eastfield Accountants is here to help. Mark specialises in guiding individuals with incomes over £100,000 through tax-saving opportunities and compliance, ensuring you avoid pitfalls like the loss of your personal allowance.
Optimise your financial strategy with personalised advice on pension contributions, salary sacrifice arrangements, and more. Find out more about taking control of your tax planning.
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CIS Returns
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Streamline your Construction Industry Scheme (CIS) returns with our efficient services. We ensure accurate and timely submissions, helping you comply with regulations and avoid penalties. Trust us to handle your CIS returns with precision and ease, allowing you to focus on your core business operations.
Tax
Self Assessment Tax Returns
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Effortlessly navigate the self-assessment process with our reliable services. We ensure accurate submissions and maximise your tax savings. Trust us to handle your self-assessment tax returns, providing peace of mind and efficient compliance.
Accounting, Tax
Landlord Accounting & Tax Returns
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Irrespective of whether you are a seasoned landlord with years of experience or have just ventured into the world of property management, the demand for expert landlord accounting services has never been more critical.
At Eastfield Accountants, we take pride in delivering a dependable, personalised, and forward-thinking accounting service tailored to landlords.