Briefings
Estate Planning
Latest News
Knowledge Bank > Estate Planning

Estate Planning: Overview

Estate planning involves tax, but it encompasses much more. As with most tax planning, the key is to know what you want to achieve - who should benefit after your death and what they should receive, but also who might you want to make gifts to now and in what form.

Inheritance tax is then likely to become the main issue, with a flat rate of 40% at death to the extent that an estate exceeds the nil rate band - currently at the relatively low level of £325,000. This is still the nil rate band. However, widows and widowers (and surviving civil partners) could inherit their late spouses unused nil rate bands. So, many people will find that this year their nil rate band is effectively £650,000 if they died this year. But you cannot afford to ignore the impact of other taxes such as capital gains tax, stamp duty and income tax in this context.

Most business assets escape the inheritance tax net under the current rules, but private homes, investment properties as well as stocks, shares and cash are generally taxable regardless of where they are situated. As your circumstances and the tax rules change, it is important to keep your estate planning under review. The earlier that you start planning, the easier it may be to achieve your objectives.