Inheritance Tax & Trusts

With the high price of homes in the UK, Inheritance Tax is no longer the concern of rich families with large portfolios of land and property.

Currently, the first £325,000 of every estate is free of Inheritance Tax (often referred to as death duties).

Under this law amounts within an estate exceeding £325,000 are then taxed at 40 per cent.

Whiteheads Solicitors can offer advice on ways of reducing this tax. We can also highlight the exemptions and reliefs that might be available to you. Whiteheads can also give guidance on how to gift money without having to pay tax, often by means of a probate trust.

It’s important to get the professional advice. For example, recent changes have made probate trusts more complex, with such factors as a chargeable lifetime transfer and the possibility of upfront entry tax.

There might also be an inheritance tax charge applied to the trust every ten years – despite the possibility of the trust being wound up during the individual's lifetime and assets returned to him/her.

Another type of trust, entitled bare trusts - also known as absolute or simple trusts - have traditionally been used for many years by parents and grandparents to set aside assets for their children or grandchildren. These trusts enable families to ring fence assets for their children's future and are often used for higher-education planning and paying university fees. Again, Whiteheads are able to advise on the set-up and administration of this type of trust.

Please contact Jim Murphy at Whiteheads Newcastle office to discuss inheritance tax and trusts in confidence on 01782 615278