What is Inheritance Tax
Inheritance Tax (IHT) is, essentially, a tax levied on any transfer of assets to other people or trusts. It is mostly paid in respect of an individual's estate on death, but it can also apply in respect of certain transfers of assets during life.
If an individual dies when they are 'domiciled' or 'deemed domiciled' in the UK, then IHT applies in respect of all their property, wherever situated. Domicile is a technical concept which identifies the permanent home of the taxpayer. If the deceased died abroad, then the tax only applies to property situated in the UK.
Under current legislation, IHT is often perceived as a voluntary tax. This is because with careful planning, it is possible to reduce or remove any liability altogether.
It ia a mistaken assumption that you need to be particularly wealthy to incur a substantial IHT liability, When you die, the value of your taxable estate is calculated. This is the total value of all your possessions and assets, less any available exemptions and relief. If the estate exceeds the nil rate tax band of £325,000, anything over that sum is usually taxed at 40%
We have many solutions to legally mitigate Inheritance Tax and should you have a potential Inheritance Tax problem, please contact Paul Humphreys on 01691 652233 to determine which would be the best solution for your circumstances.
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