Inheritance tax will be due at 40 per cent of a person's estate and is required to be paid on the value of an estate, including certain gifts and assets, that calculate to be more than £325,000 or if you are married or in a civil partnership £650,000. Any estates that are less than the nil rate band at £325,000 will be free of tax. Reducing inheritance tax is one of the reasons why people have Wills drafted for themselves. It can sometimes be charged on your death or later, on the death of a spouse or civil partner, therefore it is important for you to understand the tax well enough to know if you or your spouse or civil partner will be affected by it. There are a number of ways to potentially reduce the chances of inheritance tax but if in doubt, it is always a good idea to contact your solicitor or an independent financial adviser if you decide not to try and organise your finances yourself.
Inheritance tax is charged on the value of a person's net estate when it is in excess of the nil-rate band, and will only be payable on the person's death. Therefore a person will need to take into account all their property, assets less any liabilities and debts. Any funeral costs will also be deducted from the estate that is valued for inheritance tax purposes.
The Inheritance Tax Act 1984 states that it shall be charged on the value transferred by a chargeable transfer. It is therefore imposed that people should be prevented from giving away all their property immediately before they die to then avoid tax. Further to this, the rules provide that inheritance tax is calculated not only on the value of the property that a deceased person has when he or she dies but it takes into consideration the running total of gifts that the deceased has made over the last seven years. Therefore when calculating the size of an estate, it is advisable to look at all the gifts made in the last seven years up to and including the gifts made on death. The tax is first applied to these types of gifts and then on to the estate which is to use up the nil rate band on the gifts so that tax payable on the estate is increased. Inheritance tax is generally more subject to a person's property that is passing on death, but it can also refer to lifetime gifts unless they fall into an exempt category
What Is The Role Of A Probate Solicitor? New Year's Resolution: Make or Revise Your Will How Inheritance Claims Can Prove Very Difficult 10 Top Terms Used In Wills and Will Writing
0 comments:
Post a Comment