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Inheritance Tax (IHT)
By Heather Platts BA(Hons) | Updated August 6, 2007
“Inheritance Tax is the tax that is paid on your ‘estate’. Broadly speaking this is everything you own at the time of your death, less what you owe. It’s also sometimes payable on assets you may have given away during your lifetime. Assets include things like property, possessions, money and investments.”
~ directgov official source
Inheritance Tax (IHT) is generally considered to be one of the most unpopular and unpleasant taxes within the system - due in part to the rise in the value of property, today even individuals with modest earnings may find themselves caught within the IHT trap. There are legal ways to manage and avoid this eventuality, and is one of the more obvious and wide reaching benefits of informed tax planning.
The key points to consider are:
- £300,000 is the taxable threshold above which tax is charged at a rate of 40%
- Offsetting through gift giving to family and charity is permissible but there are thresholds to consider
- All assets of UK residents including those held abroad have to be taken into consideration
- Inheritance tax creates a steady and increasingly substantial income stream to the Treasury - it doesn’t have to be that way, with a little forethought and fiscal planning.
IHT planning isn’t a dubious black art - armed with the facts, some prudent financial advice and an effective Will your tax liability can be reduced substantially. Planning in advance is the key - so it is never too soon to start. Indeed for your future and the wealth you wish to preserve for the future - you should be making those plans now. At Cumulo we will talk through all the options as they appertain to you - from exemptions, potential trust funds and gifting . If you want to explore this area further - contact us for a no obligation consultation.
Topics: Tax planning, General |
