Inheritance tax planning is an essential to keep your estate in tack prior to death. As one of the most easily avoided taxes, Inheritance tax should only be paid by those who love the government more than their family
Copyright (c) 2009 Gareth Flanagan
Inheritance tax is not one of those topics that people like to talk about all that much. Which is understandable really.
However, changing rules on who and who is not affected by inheritance tax rules makes keeping up to date with the latest legislation not only smart but vital.
And it’s not just the rich and famous that need to be aware of the rules surrounding inheritance – if you own your own home or business for example, you need to make sure you’re taking the right steps now to ensure your loved one’s aren’t left holding the bag after you’re gone.
So what kinds of questions should you be asking about inheritance tax and planning?
Do I need a will? Who should the main beneficiaries of my will be? How much can I leave without incurring an inheritance tax liability? How does overseas property affect my inheritance tax liability? How is my partner affected by Inheritance Tax? What are the rules around ‘gifting’ assets to my family? What about trusts? As always, every individual’s situation is different so it’s vital that you get the best possible advice – tailored to your specific needs.
For example, your independent financial adviser may suggest that you ‘gift’ assets to your intended beneficiaries now, to avoid them having to pay inheritance taxes or suggest leaving a portion of your estate in trust for your grandchildren.
As a tax that generated a huge amount of government revenue it is one of the most avoidable. One politician said it is a tax that should only be paid by those who love and adore the government more than their spouse.
The rules around this tax change year on year. Only last year the threshold was increased to £312,000 per individual. Also couples are able to double up together to make joint usage of their tax thresholds. When calculating your inheritance tax liability you must take into account gifts that have occurred during the last 7 years. There are assets that do not attract IHT. A good financial adviser will take all this into account when calculating your liability. In summary this tax can be avoided if you seek the advice from the right professional
So what’s the best way to find out what’s appropriate for you? Speak to an independent financial adviser of course - or better yet, get a free inheritance tax review.
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