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Monday 10 December 2018
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glossary of terms, book

Glossary of Terms

Assets and liabilities

  • Your home and any other property (including any outstanding mortgages)
  • Your car (including any outstanding loans and hire purchase agreements)

  • Furniture, household and personal effects including jewellery etc
  • Cash in your bank/building society account
  • National Savings and/or other savings schemes
  • Stocks and shares and premium bonds
  • Insurance policies and other death benefits (i.e. Pensions)
  • Any outanding debts you may have

 

Estate

All your possessions and liabilities at the time of your death including money and property.

 

Executor

The person who is appointed by you to make sure the instructions in your Will are carried out.

 

Inheritance Tax (IHT)

Most estates don’t incur the 40% IHT on death. It only applies if the taxable value of your estate (including your share of any jointly owned assets and assets held in some types of trusts) when you die is above £312,000 (2008-2009 tax year).  It is only payable on the excess above this nil rate band.

There are also a number of exemptions which allow you to pass on amounts (during your lifetime or in your Will) without any Inheritance Tax being due, for example:

If your estate passes to your husband, wife or civil partner and you are both domiciled in the UK there is no Inheritance Tax to pay even if it's above the £312,000 nil rate band

Gifts to charity are exempt from IHT and could help reduce your liability to tax.

For further information, visit the HM Revenue and Customs website.

 

Solicitor

You can find your nearest probate solicitor here Law Society or at STEP (Society of Trusts and Estate Practitioners) who can provide contact details of local specialists who can also advise on estate matters.

 

Legacy 

A gift left to a person or organisation in your Will.

 

Life interest

A two-stage form of legacy in which the first beneficiary is given, for example, the use of your house or the interest on your bank or building society account during their lifetime. After their death, the house or capital passes to a second beneficiary named by you in your Will. Quite often a charity is the second beneficiary.

 

Monetary or cash legacy

A fixed amount of money, for example £5,000 also known as a pecuniary gift.

 

Pecuniary gift

(see monetary gift above)

 

Residue

The sum that is left from your estate when all debts, charges and gifts have been deducted.

 

Residuary legacy

After making specific and monetary gifts a percentage is left to one or more individuals or charities.  Because it is a percentage it ensures that your loved ones are taken care of and you won’t have to keep changing your Will as circumstances change. This is a particularly popular way to leave a gift to a charity.

 

Specific legacy

A gift of a particular item, e.g. a piece of jewellery or furniture.