Understanding your inheritance and beneficiaries

Tax and Inheritance Planning

There are probably few taxes more disliked than Inheritance Tax, also known as IHT. For many, it seems unfair that income and assets that have already been taxed should be taxed again instead of passed down to their intended recipients. After all, you’ve worked hard over the years for your estate!

By working with our financial planners, we can potentially help you reduce your Inheritance Tax. This makes sure that your loved ones can enjoy the benefits of your hard work.

While nothing will take the pain away of losing you, removing the stress of trying to deal with inheritance tax can significantly help. The impact of IHT can be incredibly distressing if your estate is not in order. In some cases, family members have been forced to sell off property and businesses just to pay the inheritance tax owed.

To help you mitigate inheritance tax, there is a wide range of options. One of the first steps is ensuring you have a professional will that is kept up to date to reflect your wishes. Will writing, however, is not regulated by the Financial Conduct Authority so it is only one step to preserving your wealth.

We’ll also help you explore options such as lifetime gifting and the transfer of assets to tax-efficient funds. If you’d like to find out more about what any of this entails, contact us for a no-obligation consultation.

*The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of tax relief is generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority

Get in touch

Take control of the inheritance of your assets and property

Inheritance Tax Planning

Leaving your inheritance to your loved ones brings about many complications and uncertainties. You want to ensure that your beneficiaries inherit as much as they are entitled to, but are in danger of potentially losing significant sums to inheritance tax. 

Inheritance tax planning is best achieved with the help of professional financial advisors. Before you make any decisions on your inheritance tax planning, consult with one of our financial advisors at Rhodes Wealth Management. Contact us today, to understand how you can best manage your estate and keep your loved ones financially secure after you die. 

Understanding Inheritance Tax Planning

Inheritance tax planning allows you to better distribute your estate to your beneficiaries through a variety of options. The options available to you will depend on the value of your estate, your relation to your beneficiaries, and many other factors. Navigating inheritance tax thresholds, mitigating inheritance tax, and understanding your inheritance tax liability are all essential parts of your inheritance tax planning.

Gaining an understanding of how inheritance tax will affect you will help you decide how best to manage your estate distribution. From total tax-free allowances, potentially exempt transfers, and your overall inheritance tax bill, there are many factors that you will need to discuss in order to best manage your inheritance:

Nil-Rate Band

One major part of inheritance tax planning is understanding how the current nil-rate band will work for you. The nil-rate band allows you to pass on your inheritance to your beneficiaries without creating a tax bill. 

The nil-rate is currently capped at £325,000 and will remain fixed at this rate until April 2028. This allows you to pass on up to this amount to your beneficiaries without creating a tax bill. If your estate is valued over this amount, then you will be liable to tax on the value that surpasses the nil-rate band, but only any value past that point.

Your nil-rate band may be reduced or removed if you make gifts that aren’t covered by your tax-free allowance and die with seven years of making the gifts. If this is the case, less or all of your estate will be liable to inheritance tax.

Residence Nil-Rate Band

The residence nil-rate band, introduced in 2017, allows an additional tax-free excess to be inherited by your loved ones. 

If you are leaving your home to your children, stepchildren or grandchildren, your tax-free threshold increases to £500,000, subject to your estate being less than £2m.

Combining your residence nil-rate band with that of your inheritance nil-rate band will leave you with a total tax-free inheritance sum of up to £500,000. This, however, only applies to estates under the value of £2m, at which the way you pay inheritance tax on your property differs.

For more information on your nil-rate bands and inheritance tax exemptions, talk to us today.

Inheritance tax on your estate over £2m

If your estate exceeds the value of £2m, your residence nil-rate band will be affected. As opposed to having a standard £175,000 residence nil-rate band allowance, you will be taxed at the rate of £1 of the main residence allowance for every £2 of assets over £2m.

How We Help with Inheritance Tax Planning

Rhodes Wealth Management has a variety of financial advisors available to ensure your loved ones are protected once you pass away. We’ll help keep your inheritance tax bill to a minimum, whilst avoiding inheritance tax altogether where possible.

Protecting your loved ones: Leaving your estate your family and your loved ones will help keep them financially secure after you die. We’ll ensure they receive as much as they are entitled to, so you don’t have to worry about them after your passing. 

Leaving your inheritance to your spouse: Whilst inheritance tax applies to a wide variety of situations, if you are planning to leave all of your assets to your spouse you may be exempt from paying inheritance tax.

Not only does this keep your estate as close to home as possible, but it also leaves your nil-rate band completely untouched. This means you can still distribute up to £350,000 completely tax-free to the people you wish it to go to, and even distribute £175,000 worth of property tax-free. 

Inheritance tax-free gifts: We at Rhodes Wealth Management help with managing your estate and inheritance before it becomes too late. Managing inheritance tax-free gifts over a prolonged period of time can keep your inheritance tax bill low and potentially save your loved ones significant sums in the long run.

Using trusts to reduce inheritance tax: Trusts are another way to reduce your inheritance tax and leave your loved ones with as much of your estate as they are entitled to. Legal arrangements, such as trusts, hold your assets for the benefit of your beneficiaries. Once the investment is in the hands of a trustee, the money no longer belongs to you, and so does not count towards your estate when you die. This can help relieve any inheritance tax liability for the people you are passing your estate to. 

Gifting your money into a trust also grants you control over how and when the money is paid out to your beneficiaries. This makes sure that your plan is dealt with in line with your wishes when you die. 

As the money will no longer be in your possession, however, it is thoroughly important you consult with an expert before making any decisions. Rhodes Wealth Management and our professional financial advisors can help you decide how to distribute your wealth before you die so that your loved ones can make the most of your inheritance.

Inheritance Tax Planning with Rhodes Wealth Management

There are many other exemptions that you may wish to discuss, depending on your and your family’s circumstances. 

Talk to us at Rhodes Wealth Management today to discuss your inheritance tax planning, and understand the options available to you.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief is generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

Learn how we can help

Working with you

A financial service to suit every need possible...

We provide face-to-face financial advice to our clients.

Get in touch

Giving you the opportunity to review your financial affairs regularly.

Get in touch

Managing your investments proactively, with your needs in mind.

Get in touch

Exploring new opportunities with you.

Get in touch

Planning for the future appropriately helps to preserve your estate and pass it to those closest to you.

Get in touch

Protecting those closest to you with estate planning.

Get in touch

Explore Rhodes Wealth Management

Putting you and your family first…

About us

Talk to us

Ready to start your journey?

Book an Appointment

Our financial advisers, based in Derby can assist you with every avenue of financial planning. Get in touch to find out more.



See our latest news and updates on our LinkedIn profile below.

View Our LinkedIn Account