Inheritance Tax – what you need to know.

The first form of Inheritance Tax was introduced in 1796 and known as Legacy, Estate and Succession Duties to target large properties. Over the years it has taken different forms before becoming the modern day Inheritance Tax.

The latest major change came in 2010, which saw the threshold increase in order to reflect rising house prices. You can now leave an inheritance of up to £325,000 tax-free for individuals, anything over this will incur the 40% Inheritance Tax.

Leaving a legacy to your nearest and dearest could come at a cost if you’ve not considered how your estate may be taxed. If you think you could be affected, it’s vitally important to plan ahead for the future with an experienced expert. Thinking about your family, your estate and assets, and the impact of not having a financial plan will help you identify whether you need help.

How will I know if my financial assets are below the pre-tax limit?

You’ve worked all your life to build a lifestyle you enjoy, you may have a partner and children, even grandchildren. By retirement age, many people have paid off their mortgage, hopefully built up a healthy sum of savings, or maybe even own a few luxury items.

You may think that all of the above will not exceed the pre Inheritance Tax limit, however, with increasing house prices and greater pension freedoms on investments, it could be easier than you think for your wealth to exceed the limit.

You may also wish to consider forward planning too. If you’re a couple and your partner or spouse passes before you, they could leave their assets to you which may increase your overall wealth. These assets would fall under your financial estate and may therefore be considered under Inheritance Tax when you’re no longer here.

It’s important therefore to speak to an independent financial adviser to arrange all your affairs before it could be too late. They will work with you to understand your personal financial circumstances and develop an appropriate plan for the future.

Wren Sterling advisers can advise you on how to make your money work the best it can for you and your loved ones.

Having a Will and its impact on Inheritance Tax

If in your Will, you’re leaving your home to your legal partner (husband, wife or civil partner) when you pass, this incurs no Inheritance Tax.

Leaving your home to someone else other than your legal partner means the value of the property is added to your total financial assets considered by Her Majesty’s Revenue and Customs (HMRC).

Even though it can be a difficult topic to approach, it is always wise to discuss your assets and arrange them accordingly before anything happens to you. This should be done with someone who is qualified to give financial advice and has an understanding of taxation. A Wren Sterling advisor will get to know you and with their friendly professionalism, knowledge and expertise, they can advise you on the best way to leave the legacy you want.

How do I get help sorting my affairs ready for the future?

If any of the topics above have raised some thought-provoking questions, it may be time to take control of your estate and what it looks like sooner rather than later.

If you’re ready to discuss your financial future and plan today, ready for tomorrow, then call us on 01623 676300 or visit us in branch to book your meeting with a Wren Sterling independent financial advisor and take that first step to secure your finances.

Wren Sterling can help you understand your options so you can make informed and confident decisions about your current assets and your future legacy. The first consultation is at the expense of Wren Sterling and you can have this at a convenient time and place that suits you.

Their approach ensures that your circumstances are fully understood and built into any financial plan they create with you. They’ll take the time to help you get to where you want to be and will listen with care. Contact your local Mansfield Building Society Branch to book your appointment either in Branch, over the phone or at your home.

The Mansfield Building Society is an introducer to Wren Sterling for investments, pensions and protection.

Wren Sterling is a trading name of Wren Sterling Financial Planning Limited, which is authorised and regulated by the Financial Conduct Authority. Registered No. 665653. Registered office: Castle Marina Road, Castle Bridge Office Village, Nottingham, NG7 1TN. Registered in England No. 09157918.