This is the only tax or duty imposed on the death of a person who is domiciled in the U.K. and relates only to property passing between one person and another as a result of a person's death, subject to certain exemptions.
More and more people are being caught in the inheritance tax trap. Nowadays, many people own their own houses. Add to that insurance policy and pension payouts, etc and suddenly what most of us thought amounted to a modest estate becomes a potential inheritance tax nightmare. Within certain exceptions, if you own more than £325,000 (tax year 2012-2013) on your death, any assets above this value are taxed at 40%!
We can help you to assess your liability to pay inheritance tax on your death, and advise on strategies to reduce or even eliminate your exposure to inheritance tax. It's important to appreciate that to evade paying tax is illegal, but to avoid paying tax using perfectly legal tried and trusted strategies can mean your beneficiaries, such as your spouse or partner, and perhaps more importantly your children, will inherit more of your estate instead of the Government.
- The value of an estate (for IHT purposes) includes a total of:
- everything owned in the sole name of the deceased at the time of death
- a share of everything owned jointly
- gifts from which the deceased kept some benefit, for example, a house still being lived in by the deceased but previously gifted to someone else
- assets held in trust where the deceased still has some benefit, for example an income
- any gifts made within the last 7 years (or part value)