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Inheritance Tax Planning in Scotland

The concept of paying Inheritance Tax (IHT) can be highly frustrating, especially when you’ve already paid tax on the assets that make up your estate. However, what some people fail to recognise is there are a variety of ways in which you can reduce your IHT liability. The expert IHT planning solicitors at Davidson & Shirley can provide you with clear, reliable and pragmatic legal advice that is uniquely tailored to meet your requirements, ensuring that you and your family are in the best financial position you can be.

What is Inheritance Tax?

IHT is a tax paid on your estate when you die. Before confirmation will be granted and your assets can be distributed to the people and causes you care about, any IHT your estate owes must be paid off. Depending on the size of your estate, an IHT bill can represent a substantial part of the wealth that would otherwise be passed to your beneficiaries. Many methods can be employed to reduce the amount of IHT you will have to pay – our solicitors can provide specialist advice for your particular circumstance.

How much Inheritance Tax will I have to pay?

IHT is payable on everything of value you own at the time of your death, including:

  • Your house and any other properties or land you own
  • Savings and investments
  • Cars and other vehicles
  • Jewellery
  • Artwork

Under current IHT rules, any estate that is valued at £325,000 or above will be liable for IHT at a rate of 40 per cent. If you’re married or in a civil partnership, the nil-band rate threshold doubles to £650,000. Any part of your estate that is left to your spouse or civil partner will be exempt from IHT unless they are domiciled outside of the UK. For assets that are left to anyone else (known as non-exempt beneficiaries), IHT is payable on the value that exceeds the nil-rate threshold. You should be aware that unmarried partners (such as those who are cohabiting) have no automatic rights under IHT rules and will be considered non-exempt beneficiaries. Gifts made in the seven years before your death may also be added to your estate to calculate IHT.

How can I reduce my Inheritance Tax liability?

Many legitimate steps can be taken to reduce the amount of IHT your estate will be required to pay when you die. A properly drafted Will is a crucial tool in effective tax and inheritance planning – our specialist IHT planning lawyers can advise on strategies, including:

  • Structuring your Will to minimise IHT liability
  • Setting up and utilising trusts
  • Lifetime giving – making gifts that are IHT-exempt
  • Putting plans in place to utilise tax reliefs
  • Identifying investments with favourable IHT treatments
  • Deeds of Variation – passing entitlement from one beneficiary to another
  • Using Business Property Relief – putting in place a business succession plan that allows assets to be passed on IHT-free
  • Making charitable gifts

Contact Davidson & Shirley Inheritance Tax Planning Solicitors in Lanark, Motherwell & Wishaw, Scotland

Whether you are concerned about how much IHT your estate may be liable for, or if you have a general enquiry about estate planning, it is always recommended you get specialist help from a qualified lawyer. For expert advice on planning for IHT, call Davidson & Shirley on 01555 709644 or fill out our online enquiry form.

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