The rules for married couples and civil partners (NOT partners/common law) are slightly different. The NRBs of the two are combined and all tax is paid upon the death of the second person. For a joint estate worth £500,000 at the time of the second death, there is no IHT liability. However for joint estates worth in excess of £650,000, 40% IHT applies On an estate worth £750,000 at time of death the taxman receives £40,000.
Your tax liability can be reduced or in certain cases removed with the use of Trusts via a Full Estate Plan. This is an entirely legal practice. Trusts are legal structures that control ownership and use of the assets. Whilst you are alive you have full control over the Trusts and you can amend beneficiaries, appoint trustees and vary the terms.
You can see what your liability at time of death is likely to be by clicking here and using our inheritance tax calculator.
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