As recently reported Bruce Forsyth left his entire estate to his wife to avoid inheritance tax!
To explain, no inheritance tax is payable on assets passing from one spouse to another. This is known as ‘Spouse Relief’. Mrs Forsyth has inherited £17million so the question is what happens after her death? To say that the late Mr Forsyth has avoided inheritance tax by leaving his entire estate to his wife is misleading because almost certainly inheritance tax will be payable upon her death and that includes his £17 million fortune. In other words inheritance tax has been deferred and not avoided. Inheritance tax is 40% above threshold i.e. £325,000.00 or in case of married couples £650,000.00.
To give all assets to remaining spouse so that no inheritance tax may not be the best inheritance tax advice. There are tax advantages to drafting a Will. Whilst a Will is not a tax planning tool it can be structured in a tax-efficient manner but many other important benefits may be gained.
The most obvious benefit to having a Will is that a testator’s assets can be disposed of as they wish, making sure that the persons they wish to benefit actually do benefit because without a Will this may not happen.
If you have any questions or concerns about how and when to plan for your estate please feel free to contact me on 02083643111 or firstname.lastname@example.org.
Xen Andreou, LLB (Hons), Principal, Solicitor Advocate
Proctor Moore Solicitors