Wills & Inheritance Tax

Will review service

Huw provides a will review service which is carried out in conjunction with a specialised wills solicitor or with your own family solicitor.

Calculations are made of the potential Inheritance Tax liability and suggestions as to how any Inheritance Tax liability may be reduced.

List of Financial Assets

Many individuals leave their estates in good order with a full list of assets.

However many individuals leave little or no instructions to their executors regarding their financial assets.  This makes it difficult for their executors / next of kin to know that they have traced all of the deceased’s assets. Some valuable assets may remain unclaimed if the executors are not aware of their existence.

This problem has increased in recent years when more financial assets are held online.   Please ensure that someone trustworthy has access to your financial records in the event of early unforeseen death.  The problems for the remaining family become even worse where an individual has invested in cryptocurrency – without full passwords there is no hope of reclaiming any funds.

It is of advantage to the executors / administrators of the estate to let a trusted person know how to unlock your phone / access your emails if the need arises - this will provide better access to digital records. This must be with a person you trust completely.

A brief guide to Inheritance Tax

An individual can leave £325,000 free of Inheritance Tax, a married couple £650,000.

New residence Nil Rate Band

The relief is £175,000 per individual from 6 April 2020, £350,000 per married couple provided the main family home is left directly to children / grandchildren for estates up to £2,000,000.

Up to £1,000,000 for a married couple can be left free of tax if all conditions are met, potentially saving up to (£350,000 allowance @ 40%) £140,000 of Inheritance Tax.

Note that individuals who have a discretionary trust in their will are unlikely to benefit from this new relief as the bequest is to a trust and not to a child / grandchild.  Please contact me if you wish to review your will. One recent review led to a new will for the client, removing the discretionary trust set up in 2006 when the tax laws were very different. The writing of a new will saved £60,000 of Inheritance Tax for the individual and there is a potential saving of £120,000 (!) for the married couple as a result of the will review and the drawing up of a new will. Speed was of the essence in this instance. In conjuction with a specialised solicitor from the first client meeting to a detailed review to the preparation and signature of the new will took under 48 hours

Where clients under 75 have funds held in pension drawdown schemes, these can be passed on tax free in the event of an early death.  More individuals are accumulating assets in drawdown schemes as a potential way of reducing Inheritance tax liabilities.

Individuals can obtain Inheritance Tax Relief for gifts to charities and may also claim Agricultural Property Relief / Business Property Relief where applicable.

A brief guide to Intestacy

What happens if an individual dies intestate without leaving a will?

There are strict rules which follow marriage, civil partnerships and the bloodline and the main provisions are:

  • If there is a surviving spouse and no children the surviving spouse inherits absolutely.
  • Any jointly owned assets (matrimonial home owned as joint tenants / joint accounts) pass directly to the spouse under the survivorship rules.
  • If there is a surviving spouse and children, the surviving spouse inherits the first £270,000 absolutely of assets held in the deceased’s sole name.  The spouse is entitled to a life interest in the residue of the estate which passes to the children on the second death.  The children inherit the other half of the estate immediately in equal proportions.
  • If there is no surviving spouse, the children inherit in equal shares.
  • If there is no spouse and no children, there is further provision for grandparents, siblings, uncles and aunts in accordance with the rules.
  • Very importantly a surviving co-habiting partner who is not married or in a civil partnership with the deceased has no automatic right to inherit and this can cause severe problems and difficulties.
  • There is no provision to disallow estranged members of the family, or leave legacies to charities or close friends. 
  • The message is clear – if you want to leave your assets to whom you want, a valid will is essential, or the above strict rules will apply.

A brief guide to Lasting Powers of Attorney.

By establishing a Lasting Power of Attorney individuals can choose who looks after them if they are unable to make their own decisions.  They can be set up when an individual is well and can either start immediately or take effect as capacity fails.  There are 2 types :

  1. Financial.  This allows the Attorney to look after investments, bank accounts, maintenance or sale of property etc.  The attorney(s) can be a close family member, trusted friend or a professional person.  More than one attorney can be appointed.  I act as Power of Attorney for some clients for financial matters.

  2. Health and Welfare.  This allows the Attorney(s) to make health related decisions on the individual’s behalf and will either be a close family member or trusted friend. Huw is able to discuss Powers of Attorney with individuals and families and can administer the submitting of applications for Health and Financial Powers of Attorney.

Contact Huw Roberts

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