The most flexible way in which you can draft a Will is to leave the whole of the estate on a trust for a wide class of beneficiaries. Those beneficiaries will typically include the deceased’s wife, children and grandchildren.
- You can leave instructions to the Trustees asking them to distribute your estate according to the needs of the beneficiaries.
- This can save a lot of time for you to regularly review and amend your Will during your lifetime as and when circumstances change.
- Take the advantage of “uplift” in the base cost of the assets. This means that the beneficiaries will inherit the assets at its probate value for capital gains tax purposes.
- There is no Inheritance tax charge when the assets leaving the trust within two years of death.
Nil rate bands (NRB)
NRB is the threshold, currently £325,000,below which some or all of the value of a gift, a death estate or assets held within a trust is subject to a zero rate of Inheritance Tax.
If an individual dies leaving some or all his/her nil band unused, a claim can be made for the unused proportion to be transferred to his/her spouse or civil partner.
Overall, the NRB can be worth £650,000 which means your estate would not be exposed to inheritance tax at death if your total estate value is less than this.
Residence Nil Rate Band (RNRB)
RNRB (currently £175,000) is available where you pass your main residence to children, grandchildren, great-grandchildren etc. via the Will, this is an addition to NRB.
Again, if an individual dies leaving some or all his/her RNRB unused, a claim can be made for the unused proportion to be transferred to his/her spouse or civil partner.
In total, the combine NRB and RNRB is worth £1 million per married couple. Contract us if you wish to discuss your Will or consider any Inheritance tax planning which can be beneficial.