Last Updated on 28.7.21 by Michael Smoult
The Daily Mail has reported this week that Terry Wogan has spared his family a large inheritance tax bill with some astute inheritance tax planning (IHT).
The grant of probate obtained this week showed details of Sir Terry’s estate and the net amount was only £1,047,576. His Will left the bulk of his estate to his wife of 51 years and then his three children.
It would have been expected that Sir Terry Wogan was worth a much higher amount, some thought that he was worth in excess of £20m at one stage especially as it was leaked in the past that Sir Terry was earning £800,000 per year from the BBC.
How did Sir Terry Wogan do this and end up not paying a huge amount in inheritance tax? You would suspect that he has made a range of tax planning gifts over the years, for example, potentially exempt transfers (PETs) where he made gifts to his family with the proviso that if he lived for the next 7 years there would be no inheritance tax to pay. He may have transferred property or any assets to his children or grandchildren to make sure that he did not have to pay as much inheritance tax as you would expect. This is very well advised planning and wealthy individuals should take note.
The inheritance tax limit before tax is paid is £325,000 per person – the nil rate band. If you are married and leave your estate to your spouse then you their nil rate band will transfer to your spouse meaning you could have up to £650,000 before inheritance tax is paid at 40% thereafter. There are also new rules that are about to come in force regarding the transfer of your main residence to, in time, potentially mean that you could have an inheritance tax limit of £1m if you leave your property to your direct descendants.
At Gorvins our specialist inheritance tax team are here to guide you on the best way to make the most of your estate to ensure your family get what you want them to get when you pass away. By preparing for the future and by doing sensible estate and IHT planning now you can rest assured that provisions have been made for the ones you love.
If you are considering planning for your future and want to reduce your Inheritance Tax Bill, contact our fantastic team today and we will work closely with you to sort out the next steps to take.