TAX TIP OF THE WEEK - Making a will tax efficient

The general advice is that we should all have a will so we retain control of how our estate is distributed. However, in certain situations making a simple change to a will can save thousands in Inheritance Tax.

It is common practice for wills to be drawn up with a contain a survivor-ship clause. These are used to simplify the administration and costs where sources die in quick succession. ☠️

Unfortunately, this can have a negative effect on the IHT bill. As by default if the deaths are at the same time then it is deemed a transfer of the estate from the older to the younger spouse has taken place using up the tax-free allowances.

A survivor-ship cause will override this default position which means the assets are distributed directly to the beneficiary missing out on the tax-free allowances. 😫

Therefore if there is a survivor-ship clause in the will, ask a solicitor to add a caveat that it won’t apply in the event that you and your spouse die together. 👔

This small change could end up saving thousands in IHT. 💰

I hope this was helpful, for lots more tax tips and strategies get a copy of our 71 ways to save tax checklist.