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Inheritance Tax
It has been said that Inheritance Tax (IHT), is a voluntary tax in that it can be avoided with the right planning. On death everyone benefits from a “nil rate band” (NRB) where no IHT is payable on assets up to that value. Above that capital assets are currently taxed at 40%. Although it may not be possible to avoid IHT completely, there is considerable scope for reducing the amount payable. The main methods of IHT saving involves using various exemptions and reliefs relevant to lifetime gifts including:
- potentially exempt transfers, otherwise known as PETS
- taper relief
- annual exemptions
- small gifts exemption
- gifts in contemplation of marriage or civil partnership
- gifts out of excess income
- gifts to a spouse/civil partner
- gifts to charity
- business property relief
- agricultural property relief
It is also possible to save IHT through sensible planning in the drafting of wills. This can include simple measures such as leaving assets to a spouse/civil partner or a charity to more complex planning involving trusts and the use of the relevant property relief.
Finally, it is possible to mitigate the effects of IHT through financial planning.
Our specialist lawyers will be able to take you though the complex series of exemptions and reliefs to see which are most likely to be relevant to your particular situation.
To see an example of how planning might work in practice see the case study
To speak to someone who can help with inheritance tax call, email or request a call back from one of our specialist lawyers.
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