In the past Inheritance Tax (‘IHT’) was often classed as a rich man’s tax in the UK. However an ever increasing number of middle class people have now assets in excess of the Inheritance Tax exemption thresholds and therefore have potentially exposure to IHT. Currently everyone is able to leave £325,000 completely tax-free.

Above that amount, anything you leave behind is subject tax of 40%. So for example, if you leave behind assets worth £500,000, your estate pays nothing on the first £325k, and 40% on the remaining £175k – a total of £70,000 in tax.

At Abraham and Associates we can help you with your estate planning, including succession planning and business exit strategies.

There are a number of ways to reduce the potential tax liability on your estate, and they all involve careful planning – often over a long period.