Inheritance tax

Your 10 point inheritance tax checklist

• Work out the total value of your assets and who owns what.
  Remember that each of you can leave assets in your estate worth up to £300,000 before IHT starts to bite.
  
• Split your assets between you to take maximum advantage of the IHT nil-rate band of £300,000.
• Structure your wills correctly so that the spouse who dies first can transfer wealth out of your combined estate.
• Do not simply leave it all to the surviving spouse, as this will result in a bigger IHT bill when the second spouse dies.
• One commonly used option is that the first spouse to die leaves to the children an amount equal to the nil-rate band.
• Make full use of the gifts you can make free of IHT. These include one or more gifts up to an annual value of £3,000, plus as many gifts of £250 as you like to different individuals.
• You can also make gifts of any amount with no IHT to pay, provided that you survive for seven years after making the gift.
• Less well known is the option to make gifts from income provided that they are regular and do not adversely affect your standard of living.
• Consider building a portfolio of assets that enjoy favourable treatment for IHT purposes, such as farmland, family-owned businesses and some shares listed on the Alternative Investment Market.

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