Nicole Marmor Partner
+44 (0) 1727 738989
20th August 2018 | Nicole Marmor | Private Wealth, Wills
The intestacy rules (when you die without a valid will) are set by law and can be summarised as follows:-
Where there are no children or other dependants, no parents, grandparents, siblings, cousins, nephews, nieces or aunts and uncles (blood relatives not relatives by marriage), the whole estate goes to the Crown. To have share in the estate the cohabitant would have to make a formal claim under the Inheritance (Provision for Family and Dependants) Act unless all other potential beneficiaries were over 18 and agreed that some assets passed to the co-habitant.
What does all this means for inheritance tax
One of the key inheritance tax perks is that spouses/civil partners can bequeath any amount to each other tax free. However giving assets to children will trigger an inheritance tax bill if the gift exceeds the “nil rate band” or threshold of £325,000 per person plus an additional sum (currently £125,000 as long as the whole estate is not worth more than £2.2Million) in relation to homes passed to direct descendants. If everything passes to a spouse/civil partner, then on their death, the first spouse/partner’s tax free threshold can be added to their own – thus doubling what can pass before tax. Everything that passes down above the tax free allowances is taxed at 40% of that value.
Avoiding the intestacy rules, is not the only reason it is a good idea to make a Will. With a Will:-
And just in case you were wondering, making a Will does not bring forward the date of your death!
Contact Nicole for more information.