Inheritance Tax

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Inheritance Tax is the tax that is paid on your 'estate'. Broadly speaking this is everything you own at the time of your death, less what you owe. It's also sometimes payable on assets you may have given away during your lifetime. Assets include things like property, possessions, money and investments.

Inheritance Tax

There will be a reduced rate of Inheritance Tax of 36 per cent from April 2012 for estates leaving a legacy to charity. If you leave 10 per cent or more of your estate to charity, then the government will take 10 per cent off your Inheritance Tax rate. No beneficiaries will be better off, just the charities.

this is a link to the UK Governments website relating to Tax

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/InheritanceTaxEstatesAndTrusts/index.htm

Who pays Inheritance Tax? Estates and lifetime gifts

Not everyone pays Inheritance Tax on death. It only applies if the taxable value of your estate (including your share of any jointly owned assets and assets held in some types of trusts) when you die is above the IHT Threshold from 6 April 2009 to 5 April 2015 £325,000 It is only payable on the excess above this nil rate band.

There are also a number of exemptions which allow you to pass on amounts (during your lifetime or in your will) without any Inheritance Tax being due, for example:

If your estate passes to your husband, wife or civil partner and you are both domiciled in the UK there is no Inheritance Tax to pay even if it's above the nil rate band

most gifts made more than seven years before your death are exempt (but see the next section on trusts and companies)

The Inheritance Tax threshold (or 'nil rate band') is the amount up to which an estate will have no Inheritance Tax to pay.

If the estate - including any assets held in trust and gifts made within seven years of death - is more than the threshold, Inheritance Tax will be due at 40 per cent on the amount over the nil rate band. From 6 April 2012 people who leave 10 per cent or more of their net estate to charity can choose to pay a reduced rate of Inheritance Tax of 36 per cent.

certain other gifts, such as wedding gifts and gifts in anticipation of a civil partnership (depending on the relationship between the giver and the recipient), gifts to charity, and changeable given away each year are also exempt

Independent web link for further information on planning for and protecting your inheritance www.inheritanceissues.co.uk

GOVERNMENT LINK

this is a link to the UK Governments website relating to Tax

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/InheritanceTaxEstatesAndTrusts/index.htm

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