Inheritance Tax Rules
Inheritance tax rules govern the way in which assets will be taxed in the event of your death.
Inheritance tax rules- the basics:
Inheritance tax-free allowance-under current inheritance tax rules any assets worth up to £325,000 may be passed on to beneficiaries as a tax free inheritance. Any assets above this tax free allowance will be taxed at 40%. These rules will remain in place from 2010-2015, after which they will be subject to review.
Who will be responsible for paying inheritance tax?- Inheritance tax will usually be deducted from assets before they are passed on to any beneficiaries. However if inheritance tax is due on any gifts given in the last seven years of your life, the beneficiary will usually have to pay the tax themselves. If the beneficiary is unable or unwilling to do this then the tax that is due will normally be taken from your estate instead.
Marriage/civil partnerships- Assets passed to a spouse or civil partner remain tax free if you both live in the UK. If your partner is not a resident of the UK but you are, you may only pass up to £55,000 as a tax free amount.
Making gifts- Inheritance tax rules state that tax may also be due on any gifts that you make in the last seven years of your life, depending on the circumstances in which you gave the gift, the value of the gift, and who the beneficiary is.
Inheritance tax rules- advice:
Inheritance tax rules can be complicated and it may be worth seeking professional advice to find out how rules might affect your assets when you pass away. Speak to a member of an independent inheritance tax planning advice team at one of our partner firms, for expert advice and a free initial consultation.
ABOUT TRUST ONLINE