can anyone advise me on the best person to see regarding inhertance tax,?

Answer 1

First, arm yourself with the facts. You can find out whether or not you have a potential IHT problem yourself. Only if the answer is "yes" do you need to see someone.

You don't say how much you know about this already but you need to add up all your assets and liabilities (or those of the person whose estate you are concerned about) and to the extent that the total exceeds the limit (currently £285,000) IHT will be due.

For transfers on death, the value of an estate above the nil-rate band is taxed at the rate of 40%.

Here's what's in an estate:

1. assets in the sole name of the deceased,
2. their share of any jointly owned assets,
3. assets held in a trust in which the deceased had an immediate post-death interest, a disabled person’s interest, or a transitional serial interest
4. any 'nominated' assets
5. any assets they have given away, but kept an interest in ("gift with reservation").
6. the value of an alternatively secured pension fund (ASP) from which the deceased benefited as the original scheme member, or as a dependant who received benefits from the left over ASP fund of an original scheme member.

You must add most gifts made in the seven years before death to the person's estate to calculate the IHT due, but some will be exempt and these exempt gifts do not need to be included. You can also leave out any exempt gifts left by way of a will or intestacy.

Exempt gifts are:

1. gifts to individuals more than seven years before death
2. gifts to spouses or civil partners
3. gifts not exceeding £3,000 in any one tax year
4. gifts on consideration of marriage or civil partnership
5. gifts to UK charities
6. gifts for national purposes
7. small gifts (£250 or less)
8. gifts which are normal expenditure out of income

You can deduct from the value of the death estate certain reliefs from the value of some types of property such as farms, businesses and unquoted shares. You can also deduct bills outstanding at the date of death and the funeral expenses to arrive at the net value of the estate.

The personal representatives are liable to pay any IHT due on a death estate.

For lifetime transfers the rate is 20%. Lifetime gifts to individuals are potentially exempt transfers (PETs) which only become chargeable to IHT if the donor dies within seven years. Other lifetime transfers (e.g. into trusts) have an immediate charge to IHT.


So from this you can see that there's a lot you can do yourself if the problem is small. IHT planning at its most basic is things like making sure that Granny, if she has more money than she can possibly spend in her lifetime, makes gifts each year up to the £3,000 annual exempt amount or makes lots of gifts under the £250 limit (such as Christmas or birthday presents for each grandchild) and so on. Or if she has a large pension, setting up a pattern of "normal expenditure out of income" such as helping the grandchildren out with living expenses at University.

If it's you, you're pretty sure you're going to live more than seven years, and you have money sitting around that you're never going to need, give it to your kids now instead of making them wait twenty years to get it in your will.

You can do things like this without needing to go and see anyone. The key is keeping written records.

Also, watch out for number 5 in my "here's what's in an estate" list. You can't give your house to your kids but go on living in it (well, you can but it won't be effective in removing it from your estate for IHT purposes). You would need to pay them a market rent - which they'd have to pay tax on.

If, looking at all this and applying the rules to the facts of your case, you have a significant potential liability then it is well worth going to see someone. I would phone round the large accountancy firms and law firms and find a specialist. Bear in mind that most people are NOT specialists in this area. Be really careful of Mr Small Firm Accountant who'd love your business but really can't offer any advice beyond what I've just suggested. If there are millions of pounds at stake it is well worth the cost of specialist planning even if it costs £30,000 because you are comparing this cost against a 40% charge, and for specialist planning you need a specialist.

Any accountant worth his salt would be giving you an initial meeting for free, where he will ask the kind of questions I've asked and then tell you whether it's worth complex planning and whether he can do anything for you. At that point you would decide yes or no and agree a fee.

Answer 2

The two answers immediately before me are good. I agree you need to do your research and at least have a basic understanding about your assets. If you decide that you need professional advice Chartered Accountants have a role in determining effective strategies, particularly if you are planning for the future rather than dealing with a bereavement. this is because IHT planning also impacts CGT and income tax, at least potentially. You will need a lawyer to do the paperwork (will, trusts etc) and the accountant and the lawyer will have to work together to some extent, so make sure they can get along.

If you go to an IFA for IHT advice you may get lucky, but it would be just that - luck. Most IFAs I have ever come across do not have the necessary IHT knowledge to plan a substantial estate without the assistance of lawyers or accountants. In fact, I have come across some IFAs whose idea of IHT planning is to sell an insurance policy to pay IHT. That costs far more than some decent advice to mitigate taxes.

Answer 3

You've been given Solicitor; Independent Financial Advisor and then Skipton.
However, it really depends on your Assets, both Cash and Real Estate. If these figures go over £385,000 then the best chap will always be a Chartered Accountant because they are the cat's whiskers and they really have to know every angle of Tax, which changes every year . . upwards.
I would read up on it first though because C/A's and Solicitor's will be charging over £100 per hour and I would not put my faith in Independent Financial Advisors - they are not as brainy as the first two.
Type it into your Search Engine, look at various sites and then print up the best ones so you've got some bedtime reading. Then take your direction from there.

Answer 4

An IFA - an independent financial adviser

Answer 5

A lawyer, dear.

Answer 6

Without doubt, SKIPTON FINANCIAL SERVICES