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Protect Your Home

Securing your home

A person’s home is typically their biggest and most valuable asset, both financially and sentimentally, in most cases across the UK.

Your home is important to you, so it’s vital that you ensure it is passed on to a loved one(s) of your choice in the event of your death. Leaving your home in a will or trust ensures that you (as the owner) influence what happens when you are no longer here, and that your wishes are carried out as you intended.

Placing a property trust fund within a will avoids any disputes that may occur if the law is left to decide what happens with your home, and it relieves your family of the distress of dealing with the matter through legal action.

Through our wills and trusts services, your wishes are made clear and your property will be left to a person of your choice to deal with in the most appropriate way possible.

If you die intestate – i.e. without having made a will – the law decides who gets your property, and if you have no close relatives, it could even end up in the hands of the government or Crown.

Below are some examples of the consequences of not having a will:

  • Your partner is not entitled to anything unless you are married or in a civil relationship.
  • Your children might not receive anything, as all your estate may automatically go to your husband or wife.
  • Inheritance tax is likely to be considerably more than what it would be if you had a will.

It’s fair to say that, in order to pass your home on to loved ones in the most beneficial way for them, you should include it in your will as part of a property trust fund.

Property trust funds

A trust is a legal arrangement that allows another person or solicitor to manage your assets (including your home) according to the wishes set out by you, for the benefit of certain beneficiaries.

Placing a property in a trust not only secures the asset for the benefit of your chosen beneficiaries, but also avoids losing significant value on your home due to inheritance tax and other costs.

Through a property trust fund, your beneficiaries are able to reap the rewards of any income from rent and retain the right to live in the property, without having to cover the hefty inheritance tax bills that they would be subject to without the trust.

Trust properties are also exempt from any care home fees, which can take a large sum away from the overall value of the property.

A property trust fund gives you peace of mind as you know that the home will be protected while being handed over to future generations, as it cannot be lost through divorce settlements or bankruptcy.

If you would like a consultation today regarding any trust funds, simply give us a call or complete our short contact form and we will be in touch at a time that is most suitable for you.

Inheritance tax

Inheritance tax can reduce the value of the home you leave to your loved ones by a significant amount, but there are legal ways that can help to avoid this charge.

Inheritance tax is a sum of money owed to the government upon death, essentially occurring between a person’s death and when the beneficiaries receive the inheritance. The sum can be substantial, depending on your situation and the amount of your estate.

The Nil Rate Band (NRB) is the threshold under which you are not required to pay any tax. The Nil Rate Band in the UK in 2019 is set at £325,000 and is not due to be reviewed until 2021, so if your entire estate is worth less than £325,000 you will not pay any inheritance tax.

You only pay inheritance tax on the amount that’s above the threshold, and that standard inheritance tax rate set at 40% in the UK.

For example, if your estate is worth £500,000 – £175,000 over the NRB threshold – you will pay 40% of £175,000, which is £70,000, in inheritance tax. It’s a sizeable amount, so we always attempt to help our clients put plans in place beforehand to minimise the amount of inheritance tax their estate will be subject to in the event of their death.

How to avoid inheritance tax in the UK

One way of avoiding inheritance tax on your home is by leaving it to a spouse – i.e. a husband, wife or civil partner – in which case you are not required to pay any tax on the property.

If you have no close relatives or loved ones that you’d like to pass your estate on to, you may opt to leave it to a charity. Charities are considered exempt beneficiaries, and inheritance tax does not need to be paid if you leave your estate to them.

You are likely to be required to pay inheritance tax if you leave your estate to anyone else, but if you own your home, your tax-free threshold could increase to £450,000 if you leave it to your children or grandchildren.

This is useful if you aren’t married to your partner, as you will be able to minimise the amount of inheritance tax by leaving it to your children, ultimately decreasing the total taxable amount over the threshold.

Our team of specialist advisors are available to consult you regarding your personal situation and the strategic plans you could put in place to minimise the amount of inheritance needed to be paid by your loved ones, or whoever you choose. We believe your assets should reach your loved ones in full, without losing a considerable value by having to pay substantial inheritance tax sums.

If you need to write a will or arrange a trust, we can help you at Quick Wills Ltd. To find out more about our services and how you could benefit from the help of our partners, get in touch with us today, obligation-free!

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