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Tipi Wills & Planning
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Overcome barriers of Cost, Time and Conflict
Unique blend of Expert Wholelife Planning Services
for the Isle of Wight & Hampshire
and serving all England's Counties
Tel: 01727807169
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Facilitating Agreement. A local and national centre offering a variety of mediation and the NEW Empowered to Talk premediation. We facilitate solutions over a wide range of situations from legal to difficult decision making. This includes problems & disputes around Wills and contentious probate resolution, Civil & Commercial Mediation for a wide range of conflict. claims, medical decisions or disputes
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Our virtual office can be 100% online The beauty of using technology (eg email and Zoom) is the flexibility. Your location does not matter for appointments or documents. Finding time is much less of an issue. Costs and expenses are kept down too, yet its still great getting to know each other face to face. Book your free consultation now
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Tipi Wills & Planning
"An Englishman's home is his castle"
Edward Coke 1604
Whether its a tipi or a castle it's your home
We are pleased to announce the formation of Isle of Wight Mediation to focus on a wide range of Resolution Services. Our name is changing to Tipi Wills & Planning. Its unique combination of services for planning and mediation combined remains
The content, concepts and planning services in these websites and used by this business are strictly the creation of and the property of Patricia Horwood trading as Tipi Wills & Planning & Isle of Wight Mediation
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Funding Inheritance Tax
Once a Personal Representative / Executor of a Will is appointed you may quickly know from the people dealing with your probate if it is likely Inheritance Tax is due on the Estate. Your personal representative will want to pay inheritance tax from your estate (you may have certain instructions) so it is vital that you have made provision for that. A personal representative must have arranged very early on to be able to fund the Inheritance Tax. Why? Because payment is due at the end of six months after a person has died. If you do not, HMRC will start to charge interest. Further, if Inheritance Tax is owing, the courts will not issue a Grant of Probate bringing with it a new set of difficulties which prevents access to the estate. It can be a large burden on grieving families who usually have not planned for it.
You need to ascertain whether there is a likelihood you will pay Inheritance Tax therefore, as quickly as possible and make provision for it or your beneficiaries could find themsevles in a very difficult position. You will certainly understand the value of your assets if you create a Will with a qualified person which may also give you the opportunity to do some planning such as our Wholelife Planning that underpins our Will making. The Inheritance Tax threshold has been frozen yet again, extending it to 2030. This will mean a lot more people will fall within IHT liability as property and asset values increase but the threshold does not. Since the freeze in 2021 the government has already collected additional significant sums in Inheritance Tax from people who may not have had to pay it before. You may have seen a number of articles on families who have found themselves in very difficult situations, including selling their family homes, as they now find they cannot otherwise fund the Inheritance Tax bill.
40% is a lot of money to find quickly from an estate, particularly where assets are not necessarily liquid or readily available to turn into cash, plus of course the sale and purchase of any further property may further erode your estate with the significant stamp duty tax.
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The current inheritance tax threshold is £325,000. This is where owners of assets and property who are married can benefit from significant tax relief. So, the best way to mitigate your tax is to do do your planning and make a will with professional advice. Your tax relief can be joined with a spouse's allowance also of £325,000, and indeed an used tax relief of a deceased spouse. So, if you are married, you may have a total of £650,000 tax free. If you are single, this is not the case. There is an additional tax allowance called the Residential Nil Rate Band also per person. This can give you an additional £175,000 each and extends to close family members not just the spouse. Again this is also frozen but at the moment it can provide you with one million of tax relief if your property is left to close/recognised descendants.
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The good news is the inheritance tax is calculated on the amount over the threshold allowance only and so does not bring the whole amount of your assets into liability. You may think that means that it is not likely to apply to you. Beware though, long marriages and remarriages can increase your asset value and we all know of Aunt's and Grandparent's who bought a house 30 or 40 years ago for what we would think of as a small sum, which now has a value in excess of the Inheritance Tax threshold and is now being left to you, so its either inheritance tax or capital gains tax to deal with. This could apply to any of us. So it may be surprising to find that your assets may exceed the inheritance tax threshold once things have been added together. Everything you own including your personal possessions and home contents are expected to be valued for the purposes of probate. Add that to bank accounts or shares and your estate is growing. It becomes clear why it is a particularly hated tax. However, for the most part, many of our estates do manage to pass free of inheritance tax, particularly if you are married. However, whether single or married, if you undertake some planning you may consider whether you can be gifting to your family or beneficiaries or whether there are other ways an reduce your liabilities significantly. Talk with us and see what our network of experts can advise.​
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Funding for IHT may be obtained from a variety of sources. Sometimes a specialist loan is required. This is often an area of planning that people have not considered which is why they can find themselves in difficulties. Sometimes the main asset is a house that was not expected to be sold as it is also a home to another family member which you may also have granted a life interest to to complicate matters.
By far the best advice is to plan ahead and be prepared so as to avoid or reduce the stress, anxiety and unpleasant surprises that often go with administering the estate of someone who has died.
One of the best ways to avoid inheritance tax and preserve the inheritance for your beneficiaries is to plan, make your Will and consider reducing the size of your estate by distributing what you can to your beneficiaries ahead of your death. Trusts can be a good way to support this also.
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Consider this basic sum and basic calculations : you have a house worth £650,000. A vintage car worth £15,000. A pension worth £450,000 which may have say £50,000 left when you pass. A total of £715,000. Add car, jewellery and other items and maybe add £30,000. A total now of £745,000. If you are married, there is still no inheritance tax payable if you are still entitled to all of your inheritance tax relief, eg nothing already given away. A parent or uncle has died and you are inheriting half the house and other assets including the bank accounts and remainder of pension and now your estate has had £300,000 added to it. You are now worth £1,000,095. So let's say you are still entitled to the whole of your inheritance tax relief ( still nothing has ever been gifted for example):
you are now liable for : 40% of £95,000, ie £38,000.
Or higher : imagine if you and your spouse are already at the inheritance tax threshold and then each of you inherits assets to the value of £200,000 over time. Now you have to find 40% of £400,000.
You are now liable for an inheritance tax liability of £160,000.
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Does your estate have investments, cash, pension funds etc readily available, ie within six months? Particularly since the new govt and IHT changes, there are discussions surrounding the notification of a pension fund for the potential payment of IHT. Maybe you have been putting funds into savings and investments for a "rainy day" because you have been managing your planning? Will you be relying on the sale of something, eg a second home, rented accommodation, investments or shares? All of this consideration constitutes a form of planning, There are a number of options to fund your potential inheritance tax liability. Our experts work together to offer solutions that suit you.
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You may be worried about your inheritance tax liability and would like to have that assessed. Consult with us and we can consider some planning and ways to fund that.
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An informative article written by KWW London solicitors describes the various ways you can pay IHT and why that can be difficult.
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Please call and book an Inheritance Tax Assessment consultation with us.
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It can be advised as to the likelihood of inheritance tax liabiliity and your provision to pay for it now. On the preparation of your Will, you will have collated all the information on your property, assets, investments and so on. This will be done again by your executors (Even if you think there is no IHT libility, the executor still has to report it). (Note: The actual amount only HMRC can calculate "on the day" given all rules, reliefs and liabilities and valuations they take into account). However, meaningful planning can take place now to give you an informed position and how any tax liability can be paid in a structured and planned manner. (Note: Any financial advice must come from an independent financial advisor. It may be concluded you seek further information on financial advice or products and our network of experts can advise. Discuss with us possible options and ways in which you might be able to utilise planning in a way that best suits you. Were you aware, for example, that there is an inheritance tax exemption for gifts out of surplus income? Please discuss with us.
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The best way to start your planning is to ensure your Will is up to date and that professional advice is given to aid managing your property, assets and people.