Inheritance Planning Reading, Inheritance Tax Advice Reading

Inheritance Tax (IHT) can cut deeply into your estate. It can be reduced or mitigated, but it is very helpful if you plan well in advance. For inheritance tax advice Reading, Pareto Lawrence can help.

An Introduction to Inheritance Tax:
Our current legislation on Inheritance Tax was introduced in 1986 and replaced the Capital Transfer Tax. It applies to nearly all change of ownership of capital made within 7 years of a person’s death and is calculated on an accumulating basis.

Gifts made prior to but within 7 years of death are brought into charge at a tapered rate. Such gifts are taxed on the value at the date of gift using the death rate scale applicable to the date of death.
Tapering scale: years between gift & death % of full tax rate charge at death

Years                         % Taxable
0 – 3                                     100
3 – 4                                       80
4 – 5                                       60
5 – 6                                       40

Lifetime gifts made from trusts are taxed at 1/2 of death rates.

To take advantage of the chances provided to reduce (or create a fund to take care of) this tax, one must understand the main exemptions. They are:

1. Assets moved between husband and wife.
2. Gifts of up to £3,000 in any one year.
3. Gifts of up to £250 per beneficiary in any one year.
4. Gifts which are part of one’s normal spend out of income (after deduction of
income tax) which leave enough funds to maintain one’s normal standard of living.
5. within certain limits – gifts for marriage and gifts to charities.


For more information, download our IHT fact sheet.

Inheritance Tax Planning Reading, Inheritance Tax Advice Reading