An inheritance tax specialist has revealed how people can pay zero per cent on assets worth up to £1million.
Speaking exclusively to GB News, estate planning expert Steve Bish advised people to make the most of allowances in the tax code following what he describes as “terrible news” in last month’s budget.
Mr Bish, founder of Steve Bish Estate Planning in St Albans, said people should “maximise” the current allowances which include children being able to claim £650,000 tax free from both parents.
His advice comes ahead of the release of a new book, called Where There’s A Will, There’s A Way, which GB News will be able to get their hands on.
Mr Bish told GB News: “Married couples or people in civil partnerships have never paid inheritance tax when they pass on their estate to the surviving partner; there’s always spousal exemption. It’s the next generation that pays for it.
“It used to be that the children would pay 40 per cent of everything over the £325,000 nil rate band but they can now claim both parents’ allowance. It doesn’t matter about the number of years in between their deaths so that brings it up to £650,000.
“As long as houses are left to direct descendants, children or grandchildren can claim another £175,000 inheritance tax-free per property resident. If they fill in the right forms and make all the claims, then it’s a million pounds before children of a couple actually pay anything.
From April 2027, unused pensions will be included in estates for IHT purposes | GETTY“But of course, with silly house prices these days, it’s very easy to be over a million pounds.”
The award-winning advisor, who helps guide and navigate people through the challenging and often intimidating landscape of inheritance tax, also recommends that people maximise the gifting allowance during their lifetime.
“A good way to limit inheritance tax liability for beneficiaries is to maximise your ‘annual exemption’,” he says.
“You can give away a total of £3,000 worth of gifts each tax year without them being added to the value of your estate.
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For those with larger estates, there is many ways the inheritance tax liability can be reduced
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GETTY“Each tax year, you can also give away some money or possessions free of Inheritance Tax known as the normal expenditure out of income exemption.
“How much is tax free depends on which allowances you use and your own income level, since the rules state you must be left with sufficient income to maintain your usual standard of living.”
For those with larger estates, there is another way the inheritance tax liability can be reduced.
“If you have a big enough estate and are so inclined, you can reduce how much inheritance tax is liable by giving 10 per cent away to charity. That brings the 40 per cent inheritance rate down to 36 per cent.
“Aside from estate planning, my best advice is to seek advice from a qualified financial planner because there are other things like business property relief bonds and loan trusts.
“A good, qualified financial advisor will be able to help make the most of your estate and ensure you leave the maximum amount to loved ones, not to HMRC.
Mr Bish has penned a clear and accessible new guide called Where There’s A Will, There’s A Way, inspired by the death of his friend Carl 25 years ago.
It offers practical advice on areas such as probate and inheritance tax, safeguarding children, pets, digital assets and more.
The Resolution Foundation, typically aligned with Labour thinking, criticised the public nature of policy changes as abnormal and potentially damaging | GETTY
“Carl hadn’t made a Will,” Mr Bish explained. “This meant his family had the tragic task of organising his affairs. They had to try and work out what he’d have wanted by following the ‘Rules of Intestacy’ – a strict set of guidelines laid down by the government which must be adhered to when someone dies without leaving a valid Will.
“I don’t want other people to go through that and I hope my guide helps people plan for after they have gone.
“I’ve tried to cut down the jargon and talk in plain English. Hopefully it may help reduce some of the stress and burden which families like Carl’s have to go through in their darkest hours.”
Where There’s A Will, There’s A Way will be released soon. It is designed for anyone who hasn’t yet made a Will, particularly parents, homeowners, and business owners, and offers straightforward tools to make life easier for those left behind. For more information visit www.
