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Inheritance tax and estate planning

in partnership with Schroders Personal Wealth

Inheritance tax and estate planning is a way of passing your personal wealth onto family, friends or other beneficiaries.

Through our partnership with Schroders Personal Wealth, you could access help and advice with making plans for your estate.

You could benefit from wealth management services if you have:

  • £100,000 of sole or joint savings, investments and/or personal pensions; and/or:
  • You earn £100,000 or more a year of sole income.

Fees/Charges will apply if you take out a financial plan, product or service.

Tax treatment depends on the individual circumstances of each client and may be subject to change in the future.

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Why pay for inheritance tax and estate planning?

  • Help your beneficiaries access more of your wealth.
  • Potentially reduce the amount that your estate is taxed.
  • Avoid leaving your loved ones with a large tax bill.

What is inheritance tax?

Inheritance tax is a levy placed on the estate of a person who passes away. The inheritance tax rate is 40% of anything over the threshold of that £325,000. The total value of an estate considers several sources, including:

  • Property and land value
  • Savings
  • Investments and pensions
  • Other valuables, such as vehicles, jewellery and other personal items

How does inheritance tax and estate planning work?

Effective estate planning could help you reduce the amount of inheritance tax due when your wealth passes on to your beneficiaries.

The threshold for inheritance tax is £325,000. This means your beneficiaries will pay 40% inheritance tax on any parts of your estate that are above the value of £325,000.

For example, if your estate is worth £425,000, you'll pay inheritance tax on £100,000. At a rate of 40%, you'll pay £40,000 in inheritance tax.

That's why planning how you'll pass your wealth to your beneficiaries, both during your life and after your passing is so important. It ensures those you care about get the most from your estate's worth.

How might you be able to reduce the amount of inheritance tax paid?

Gifting your estate to a partner

Should your spouse or civil partner reside in the UK, you can gift them your estate, regardless of the total value.

If an estate is left to a spouse or civil partner, it isn't subject to inheritance tax.

Distributing during your lifetime

You may choose to distribute your wealth to your beneficiaries during your lifetime.

You could do this by giving possessions to your children, donating to charity or arranging tax-efficient cash gifts.

Place money into trusts

Any money placed into a trust isn't subject to inheritance tax.

You could place money into a trust for access later, or upon your beneficiaries meeting a certain criteria, such as a child's 18th birthday.

Gary Smith, Wealth Adviser at Schroders Personal Wealth

"Making sure your family is well taken care of after you’ve passed away is important to many people. Estate planning and inheritance tax planning could help you pass on more of your wealth.”

Watch this short video to see how Schroders Personal Wealth can work with you towards your financial goals.

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Book an appointment

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Or call us now

On 0345 366 2729 or +44 (0) 113 9628. Lines are open Monday to Friday 9am to 5pm (Tuesday and Thursday until 7pm) and Saturday 9am to 1pm. Excludes bank holidays. Calls may be monitored and/or recorded. Call costs may vary depending on your service provider.

Halifax is a division of Bank of Scotland plc. Registered in Scotland No. SC327000. Registered Office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 169628.

Schroders Personal Wealth is a trading name of Scottish Widows Schroder Personal Wealth Limited.