Inheritance tax, estate tax & tax brackets November 2017

Death and taxes…yes we all have to pay them but how much is inheritance tax? When? What are you liable for? How do I pay what I owe? It can be a daunting and difficult task to work this out when you’re actually trying to do your job and live at the same time…

 

Here are some of the most frequently asked questions and topics including links to information that we receive around tax for individuals.

How much inheritance tax will I pay?

Inheritance tax is a tax on the estate (property, money and possessions) of the deceased. Normally if the value of your estate is below the £325,000 threshold there will be no inheritance tax due or if you leave everything to a spouse or civil partner, charity or community amateur sports club. The Inheritance tax that you will pay is dependant on the structure of your finances and the extent of the Estate left.

Inheritance tax rates / Estate tax rates

The standard Inheritance tax rate is 40% only charged on the part that is over the threshold. The estate can pay Inheritance Tax at a reduced rate of 36% on some assets if you leave 10% or more of the ‘net value’ to charity in your will.

Inheritance tax planning

Without correct planning HMRC could potentially be the biggest beneficiary of your estate. We offer the latest advice to you and your family with the aim of keeping as much of your wealth with your family while allowing you to live the life you want.

The Residential Nil Rate Band, together with the proposed simplification of the taxation of family trusts means that inheritance tax is one of the most misunderstood taxes, but also one of the most relevant. We can help you make the most of the various allowances and reliefs and avoid any pitfalls so that you can pass as much of your hard earned wealth as you can down to the next generation.

To learn more about our tax planning service visit our Tax Planning page below for more information:

https://www.swindellsaccounting.co.uk/services/tax-planning/

Income Tax Rates / Income Tax Brackets

We’re taxed on what we earn…I know it hurts us too. Income tax is structured in ‘bands’ with a current personal allowance of £11,500.

You then pay 20% of anything earned between £11,501 to £45,000

40% between £45,001 to £150,000

45% on anything earned over £150,000

For any further information you can use the link below

https://www.gov.uk/income-tax-rates

Capital Gains Tax

Capital Gains Tax is the tax on the profit when you dispose of an asset, it’s the tax on the gain you make not the total that you receive. You pay Capital Gains Tax on chargeable assets:

• most personal possessionsworth £6,000 or more, apart from your car
• property that isn’t your main home
• your main home if you’ve let it out, used it for business or it’s very large
• shares that aren’t in an ISA or PEP
• business assets

For further information on capital gains tax in the UK you can follow the link below:

https://www.gov.uk/capital-gains-tax

Income Tax Calculator

If you’re looking for a quick way to roughly calculate your take home pay after tax here is an online tool that can give you some guidance:

https://www.moneysavingexpert.com/tax-calculator/

Remember not everyone’s tax affairs are this simple and if you need help or a little advice we’re always here to help.

Get the advice you need:

If you are interested in learning more about how to structure your finances and take advantage of our expert accounting & tax knowledge in Sussex & the South East get in touch with Robin our Tax Partner and head of our ‘Private Client’ arm of the business who can offer you some guidance on the best strategy to take.

Robin Stevenson - Tax Partner

Email: robins@swindellsaccounting.co.uk

Tel: 01825 763 366