Telephone
01295 698600

Email
info@cherwellfs.co.uk

Ground Floor
Unit 15 Somerville Court
Trinity Way, Banbury Business Park
Adderbury, Oxfordshire
OX17 3SN

GET DIRECTIONS

Telephone
01295 698600

Email
info@cherwellfs.co.uk

Ground Floor
Unit 15 Somerville Court
Trinity Way, Banbury Business Park
Adderbury, Oxfordshire
OX17 3SN

GET DIRECTIONS
INHERITANCE

When an individual dies, the property, money and other assets that they leave behind (minus any debts that have to be paid off) is known as their ‘estate’.

This estate is usually left to the friends and family of the person who has died and effectively becomes their inheritance. This is where inheritance tax (IHT) comes in play. Thanks to IHT the UK government is able to lay claim to a sizeable chunk of the value of an individual’s estate when he or she dies. Of course, IHT is a tax that not everyone is required to pay.

IF YOUR ESTATE IS ABOVE
A CERTAIN LEVEL UPON YOUR DEATH,
THERE MAY BE TAX TO PAY

It’s only due if the deceased’s estate is valued over the current IHT threshold (£325,000 tax year 2025/26). The tax is payable at 40%* on the amount over this threshold. If the estate is valued below this threshold it falls within the nil rate band (NRB) and no IHT is payable. In addition to this there is also an additional residential allowance of £175,000( tax year 2025/26) depending upon meeting certain criteria.

What this means is that an individual with an estate worth more than £325,000 will be required to pay IHT at a rate of 40% on anything above that level, unless you qualify for the residential allowance, which would increase this to £500,000. This 40% on the excess can be reduced to 36% provided the deceased leaves 10% or more of their estate to charity. 

What if I’m married?

Married couples and civil partners are able to pass their assets and possessions to each other tax-free on death.

Also, if the tax-free allowance is not used by the first to die, the surviving partner is then able to double the nil rate band to £650,000 upon their death, with a further £350,000 potentially available through the residential allowance.

WE WILL TRY TO MAKE
THINGS EASY TO UNDERSTAND
THAT NORMALLY ARE NOT

Can I avoid it?

Dealing with this prior to your death, is one of the biggest single ways to save unnecessarily paying more money in inheritance tax, as some simple actions could potentially save you a significant amount of money, ensuring that your hard earned wealth is passed on to the people who you care about rather than the tax man.

At Cherwell Financial Services we look to utilise your savings in a way to reduce the tax your estate may pay if you had left it as it was. We can use some or all of the below options to help mitigate some of any liability your estate may have.

Due to its complex nature, should you be concerned about inheritance tax and the planning required to help reduce its impact please contact Cherwell Financial Services

Cherwell Financial Services Ltd is directly authorised and regulated by the Financial Conduct Authority. Registered Office Ground Floor, Unit 15 Somerville Court, Trinity Way, Banbury Business Park, Adderbury, Oxfordshire, OX17 3SN. The Financial Conduct Authority does not regulate taxation advice and trust advice, university/school fees planning and some aspects of commercial mortgages and buy to let mortgages. We are entered on the Financial Services Register no 624548 at "https://register.fca.org.uk"

Registered in England. No. 08566532. Registered address as above.

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