Inheritance tax is often referred to as a voluntary tax – the reason for this is that if steps are taken early enough during an individuals lifetime it is often possible to avoid any liability.
What is inheritance tax?
Inheritance tax (IHT) is charged on a person’s estate when they die and on certain gifts made during an individual’s lifetime.
On death, IHT is charged at 40% on the value of the of an individuals estate over £325,000. If you quickly estimate the value of your house and personal belongings it isnt surprising that more families are being faced with less of their estate going to their children to pay for a large tax bill.
Have a look at our factsheet which summaries some of the reliefs available and also will help you to calculate your potential IHT exposure.
What can we do?
Inheritance tax is often referred to as the voluntary tax – the reason for this is that if steps are taken early enough during an individuals lifetime it is often possible to avoid any liability. Let’s tax a moment to consider the three stages of taxation:
- You earn money – pay your tax
- You save your money – pay more tax
- You die – do you pay more tax?
Well, the consequences of doing nothing is that your family pay 40% tax on your already taxed income. No one wants to pay tax if they can avoid it however all to often this can happen if advice is not sought early enough. We can summarise the options to minimise your IHT exposure.
Professional expert advice
It is never to early to seek advice, and this should be an area that you revisit to ensure that you are maximising the reliefs available and can provide for your family at the appropriate times.
cleartaxation have a professional and experienced team to discuss your options with you – illustrating fully the costs and benefits of each option and allowing you to make the correct decision for you and your family.
We offer a free initial inheritance tax review today and our customised IHT solutions to help put your mind at rest.