Guidance on legacy issues and tax on estates

A While I can provide general commentary about the areas you raise, for specific recommendations or advice to be made, further information would be needed from you.

The answer to your first question is that Capital Gains Tax (CGT) effectively dies with us. Your beneficiaries would stand to inherit your shares from you with a clean slate, and any future gains would be taxed from the value at the time they inherit them.

Any amount of CGT payable in your lifetime can be managed and mitigated by using your annual allowances.

Furthermore, your income position needs to be taken into account. One consideration for you at this stage will be Inheritance Tax. Whether this would apply to you is hard to establish at this stage, however:

Each individual taxpayer in the UK benefits from a nil-rate band of £325,000. This is the first portion of your estate, which will not be liable to any IHT.

Each individual also benefits from a residence nil-rate band of up to £175,000, contingent on your home having a value of that sum or more, the value of your overall estate not exceeding £2,000,000, and your home being passed on directly to your lineal descendants.

This means that each individual can benefit from up to £500,000 of nil-rate bands before any IHT becomes payable.

For spouses, there is no IHT to pay on assets inherited by the surviving partner. If your wife passed the entirety of her estate to yourself, then you will have inherited 100 per cent of her nil-rate bands, meaning you should only be liable for IHT on your estate above £1,000,000, depending on the value of your home.

Based on you having two properties and a share portfolio, it is possible that you may have a potential liability to IHT should your estate exceed a million pounds, and the tax would be applied at a rate of 40 per cent on the value over that threshold.

It would be wise to take action now, to achieve your best possible outcome.

A deeper analysis will be required, and working with a qualified financial planner will provide the assistance, guidance – and advice if needed – that you require.

Attending Acumen’s IHT event at the Bonham Hotel in Drumsheugh Gardens, Edinburgh, on 27 August may help you, and be the first step to engaging a financial professional.

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