UK INHERITANCE TAX MANCHESTER
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Need some information on the UK inheritance tax and a few tips and tricks on how you can optimize your estate to avoid paying more UK inheritance tax than you need to? Then you have come to the right place. Read on because in this article, we will tackle the basics of the UK inheritance tax and what are the things that you can do to minimize the amount of this particular tax that you have to pay.
What you need to know first about the UK inheritance tax is that there is actually already an exemption in place for all individuals and this is known as the IHT or inheritance tax threshold. Currently, the IHT for the UK is set at exactly £325,000 per person. What this means is that all individuals have a £325,000 exemption on their UK inheritance tax. If you die and your estate (all the properties and finances that you leave behind) does not amount to more than £325,000 over-all, then you are exempt from paying the UK inheritance tax. Of course, this is not an automatic exemption. The estate must be valued first and then it must be reported to the HMRC (HM Revenue and Customs). This is usually done by a professional valuer for more accuracy as required by the HMRC.
The £325,000 amount is called an inheritance tax threshold for a reason. Any amount of your property that is more than the threshold is considered to be taxable.
UK inheritance tax – The Rate Is 40%
The current rate of the inheritance tax as imposed in the UK is 40%. So what does this mean exactly? It’s really quite simple. It means that if you have properties and finances that exceed the inheritance tax threshold of £325,000 then the amount of your estate in excess of the threshold will be taxed at a rate of 40%.
Can I Avoid Paying The Inheritance Tax On My Property?
Please do consider that the inheritance tax only becomes due and demandable by the government after your death. This means that the tax burden is imposed on your estate and not directly on you while you are still alive. With that said, if you want to avoid or at least minimize the amount of inheritance tax that you have to pay, then there are actually several ways to do this.
Making A Will
This is one of the most straightforward ways of avoiding or minimizing inheritance tax. It ensures that all your assets are distributed according to your wishes and allocating some of your properties to charity and certain institutions makes these portions exempt from inheritance tax.
Giving away some of your assets to meet the inheritance tax threshold is another strategy. Gifts are tax-free as long as the giver survives for at least 7 years since the gift was given.
Putting your assets into trusts allows you to still enjoy the income from your property but without being subject to inheritance tax.
Just Spend It
No point in being frugal in this world. Just spend some of your assets until you are within the borderline £325,000 or a little bit above it.
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