Refer a friend and receive up to £1,000!  

Inheritance Tax

World class accounting from award winning chartered accountants you can trust

This is the tax payable to the tax authority on the transfer of money or property upon the death of the owner. Usually, it is also referred to as Estate tax although International law establishes the differences existing between both. Similarly, it is not every inheritance that is taxable. There is a stipulated threshold that makes an inheritance taxable. An inheritance is not taxed if:

• The measurable value is below £325,000

• The inheritance, even when above £325,000 is transferred to a spouse or civil partner, dedicated to a charity or social community like sports club.

Note that the tax is on the property or money and it is not the beneficiaries who are expected to pay. It is the funds from the estate that the tax is paid from. The beneficiaries may have to pay for rental incomes receivable from a property to be passed to them in the deceased’s will. Usually, the executor of the will handles this.

Irrespective of the case applicable, you still have to report to HM Revenue and Customs (HMRC). There is an Inheritance form to be filed in order to carry through the process. On the other hand, if inheritance is to be charged, the standard tax rate is 40%. The percentage charged against the property can only be reduced to 36% if 10% of it is to be transferred to a charity organisation.

There is a calculation involved in knowing the tax rate to be paid on inheritance. Nordens is available to carry you through the requirement. We will help you to use the calculator where applicable. Other things which are well disposed to doing on your behalf are:

• Estimating the value of the inheritance or estate and thereafter report to the HMRC

• The value of every distinguishing part of the assets

• The value of existing debts and liabilities on the estate

• Considering the applicability of Inheritance tax relief and possible exemptions

• Existing contributions to charity and social communities and the actual amount

• Estimating the value of gifts made in about 7 years before the death of the holder

• Threshold and; many others

Knowing these are essential before commencing with the process involved. Having ascertained all these, we will proceed with collecting and filling all forms for Inheritance tax. As much as possible, we help our clients to save money legally by suggesting ways to cut it. So many people are aware that Inheritance tax can cost a lot of money. It is therefore advisable to seek financial expert advice ahead of the process. Nordens provides financial advice simple steps that you can take to avoid paying too much that can be afforded from the property. In addition, we will guide you on how the Inheritance tax rules apply to your asset.

We are here to make you comfortable in all things. You can always reach our wills, trusts and tax experts on Inheritance Tax planning. Meanwhile, we are glad to provide answers to some of the frequently asked questions below.

Frequently Asked Questions

Why is Inheritance Tax paid?

Inheritance Tax is paid on the value of an asset that is passed across in the situation of the owner’s death. It becomes an issue upon death and it is one of the most controversial issues that transfer of ownership bears. It is a policy which attempts to distribute income equally among all the social and economic classes in a society. The motive is to ensure that the income gap in society is fair and stable. The money gained from Inheritance tax is still turned back into society by the government for the benefit of all.

What is the Inheritance Tax threshold?

There are policies involved in tax payable on inheritance. The current threshold is £325, 000. This means if the measurable value of the property is below £325,000, there is an exemption. On the other hand, if the measurable value exceeds the amount stated above without any benefit of tax reliefs, 40% will be charged on the value of the asset or property.

Meanwhile, the threshold is transferable to the estate of a surviving spouse or the party to a civil partnership. In this instance, a double threshold is benefited. This becomes £650,000 and thus; the percentage to be charged will be reduced.

How to reduce Inheritance Tax?

When it comes to Inheritance tax, you may end up with an amount that you find annoying. There are however ways in which you can reduce the amount payable. You can reduce it by giving some assets out to charity or social communities. By leaving assets to charity, your tax is calculated using 36% rate instead of 40%. In the instance of marriage or civil partnership, you can give your inheritance to your partner who is a permanent resident in UK. Also, you can opt for putting some into a trust in your way. The capital gain of whatever is put under trust does not accrue a liability.

Can Inheritance Tax be avoided?

Heirs have to pay Inheritance Tax of 40%, this means the property cannot be transferred in all its entirety. It does not seem a fair deal when almost what is being passed has to be sold in order to pay the tax bill. Thus; avoiding Inheritance tax is not a bad idea after all. There are several ways to do this legally. It is advisable to consult with a financial advisor before taking any step. You should be reminded that HMRC has penalties for defaulters. Useful ways include giving away those assets that are free from Capital gains tax, putting assets into a trust or donating to charity.

Can Inheritance Tax be deferred?

Traditionally, Inheritance tax is payable within the sixth month after the former holder passes on. Given some circumstances like family disagreement and interpretation of the will, the payment of inheritance tax can be deferred for about ten years. Usually, there is going to be an agreement concerning how to pay in instalments. For example, if a deceased holds over 50% of shares or bonds in a company, any Inheritance Tax that is applicable can be paid in instalments. Meanwhile, it should be noted that deferring the payment of Inheritance Tax means you will have to pay interest.

Beyond Accountancy

At Nordens we're more than just accountants, we're business experts who can help you achieve the biggest goals.

Nordens Strategic

Our specialist strategic division at Norden’s boasts some of the leading entrepreneurial business minds in the country. They cater towards delivering consistent success stories for businesses looking to achieve all their goals and more.

Through highly tailored guidance, coaching and advice, Norden’s Strategic are able to define exactly how your business can attain new levels of success.

Regardless of how you define ‘success’ for your business, our strategic service is guaranteed to bring about real and lasting change. By partnering with some of the UK’s top business coaches, we steer you along the path to greater future.

Accounting 2 You

Every business, no matter how big or small, needs to make the right decisions. How to best manage your accounts can put huge question marks over your business. Accounting 2 You are here to take that away and provide all the answers you need.

Our bookkeeping branch offers a fully inclusive, comprehensive service that they can trust. Since 2005, our specialist bookkeepers have been successfully managing the accounting of individuals and small businesses.

With experts in payroll analysis, credit control and financial recording, Accounting 2 You will lead your business efficiently and with a real purpose to help you grow and prosper.

Voted as EXCELLENT - 9.9 out of 10 based on 164 reviews

Chris Dyer

Director - Metro Bank

Nordens are always very easy to deal with and extremely professional and efficient. I would have no hesitation in recommending them to my clients for their accountancy needs, no matter how complex they may be.

Read more reviews on Trust Pilot

Jamie Brown

Co-Founder - Chicmi Limited

Very good to work with - the team go above and beyond to make the accounts easy and efficient. They're all super friendly and a joy to work with.

Read more reviews on Trust Pilot

Simon Rose

Director - Rose Opticians

I have been using Norden Chartered Accountants for 5 years and very happy with the service provided. All members of the team are very knowledgeable and have a wealth of experience which has proved very beneficial to my organisation

Read more reviews on Trust Pilot

Rebecca Bossick

Founder & Director - Physio LDN

Very easy to contact and put me in touch with the right person whenever I need to ask any questions. Extremely knowledgeable and can help me manage my various businesses whenever I need.

Read more reviews on Trust Pilot

James Aconley

Principal - Pauline Quirke Academy

Great accountants, always available to offer advice. The team have transformed my business.

Read more reviews on Trust Pilot

Christopher Wilce

Founder - Dataphone

Having worked with Nordens over the last 5 years, not only to look after my annual accounts but they have also provided outstanding professional advice. They have guided me through a Company share buyback with clear and objective advice. We have also been using Nordens strategic services for a couple of years, which has helped bring about significant improvements that exceeded my expectations. With experience of working with several local accountants over my 29 years in business, I’m very pleased with the service I have received from Nordens.

Read more reviews on Trust Pilot

Dave Hodges

Director - Linekers

Trusted our business with Nordens for over 10 years now and watched the company grow into the successful innovative business it has become today. Deservedly so. Every aspect of financial advice we need is always given promptly and with a smile. We have total confidence in all aspects of advice Nordens give. If you are looking for accountants, its a no brainer!

Read more reviews on Trust Pilot

Tony Charles

Founder - Foundation Sports Limited

A fantastic, modern, vibrant firm that care about the clients and their staff in abundance. It is rare to find an Accountancy firm with such vibrance and focus and relationships. It is no wonder they win award after award in their field.

Read more reviews on Trust Pilot

Peter Horlock

Managing Director - Prime Time Boilers

I have been with Nordens for many years now and they are a great accountants.

Read more reviews on Trust Pilot

Simon Cushing

Founder - Vivid Finishes

We have used Nordens for the last 5 years and have had a great service throughout. The guys are very passionate about what they do and have played a part in the growth of our company, highly recommended.

Read more reviews on Trust Pilot

Andrew Martin

Managing Director - AMD Interior Architecture

Great Service at Nordens from a friendly very approachable team Particularly Kirsty Willis and Joe Sword who have been helping us since we started the business in 2016.

Read more reviews on Trust Pilot

James Robinson

Director - Forma London

Nordens provide a first class service. We moved to Nordens last year and have been impressed with the level of service provided. Keep up the good work!

Read more reviews on Trust Pilot

Latest News

We've always got our ears to the ground when it comes to interesting, useful and topical information relating to business and accountancy.

Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Seven Steps To Plan…
Everyone seems to agree that we are on the verge of a worldwide recession. Whether or not this is the case, the economy is facing difficult times and this will affect many businesses. However, as a business owner, there’s no...
Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Can You Claim The…
What is the employment allowance? The employment allowance is a recruitment incentive aimed at smaller employers. It’s worth up to £3,000 per year to set against your employer’s Class 1 NIC bill, making it a valuable allowance...
Nordens TV

We love making videos that break down convoluted accountancy jargon into a plain talking explanation of the important facts.

Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
What Is Inheritance Tax?
Safeguarding your loved ones against paying too much inheritance tax If your estate is worth more than £325,000 when you die, your heirs will have to pay inheritance tax on everything over that amount - but they will pay nothi...
Nordens Chartered Accountant and Business Advisers | Strategic Business Planning | London | Essex | Award winning accountant
Preparing Management Accounts
Hi, I’m Mitch Hahn, Partner at Nordens Chartered Accountants. Today I am going to explain what Management Accounting is and how you can use it to help you become more successful. Welcome to Nordens TV! Management accounting ...
  Why I Founded Nordens
Accounting 2 You

In November 2002, having sold our other business interests off earlier in the year, I decided to set up Nordens Chartered Accountants. The easy part was knowing how to do it, as I had established and built a smaller practice a few years earlier, the difficult part was not following the traditional accountancy path. Having run businesses, both successfully and unsuccessfully, I wanted to help business owners resolve their short term problems and work with them to achieve their longer term goals. Business has always been my interest and I love that I can help business owners achieve what seems like the impossible every single working day.

Mark Norden Signature

Mark Norden

We're Professionally Certified

Our limited company accountants have a range of qualifications from The Institute Of Chartered Accountants (ICAEW) to the Association of Chartered Certified Accountants (ACCA). They follow the bye-laws, regulations and ethical guidelines of the ACCA and we are an ACCA accredited employer. We are also accredited by Professional Passport for our Umbrella and accountancy services.