What is Inheritance Tax Planning?
At its simplest, inheritance tax is the tax payable on your estate when you die if the value of your estate exceeds a certain amount. Currently, inheritance tax is charged at 40% on the value of estates above the threshold (nil-rate band) of £285,000, subject to any exemptions and reliefs that may be available. Your estate is basically the net value of everything you own – all your assets minus any debts. Why do you need to plan? Doing nothing is not an option. Without proper tax planning, many people can end up leaving a substantial tax liability on their death, considerably reducing the value of the estate passing to chosen beneficiaries. Barclays has helped customers plan their estates efficiently for over a century. Our dedicated specialists can review your financial position and offer expert advice on your options.
Inheritance Tax (IHT) is the tax paid to Her Majestys Revenue & Customs (HMRC) on a persons estate (total assets or wealth held) on their death. IHT is also known as death duty or wealth tax. Each person has a nil rate band which is the amount of a persons estate at or below which is exempt from IHT. The nil rate band can be revised from time to time by the Chancellor of The Exchequer. Currently in 2008/2009 the nil rate band is 312,000. IHT is paid by the executors (where a will exists) or the administrator (where there is no will) of the deceaseds estate, and has to be paid prior to the distribution of the remaining assets to the deceaseds beneficiaries. If the deceased has not made or does not have a valid will, then the remaining assets of the deceased estates will be distributed under the law of intestacy, which is a prescribed rule of succession. Various allowances and exemptions are available that can be used to reduce the IHT liability. IHT Planning is required to ensure that s
The process of inheritance tax planning is a strategy designed on minimizing the amount of inheritance taxes that heirs must pay on any assets inherited from a deceased loved one. In making use of effective and legal means of lessening the tax burden associated with the inheritance, it is possible to use inheritance tax planning as a means of insuring that beneficiaries do not encounter temporary periods of financial hardship as a result of the inheritance. In order to address the issue of possible tax burdens that must be paid by heirs, it is important to know what type of assets are subject to taxation. While the list of assets may vary based on the country of origin, there are a few examples that are subject to taxes just about everywhere. This list includes any real estate holdings such as homes, apartment buildings or office buildings. Cash disbursements are almost always taxable. Also included are lump sum payments that are made from pensions or retirement plans as a result of th
At its simplest, inheritance tax is the tax payable on your estate when you die if the value of your estate exceeds a certain amount. Currently, inheritance tax is charged at 40% on the value of estates above the threshold (nil-rate band) of 312,000 subject to any exemptions and reliefs that may be available. Your estate is basically the net value of everything you own – all your assets minus any debts.
Proper inheritance tax planning could save your family hundreds of thousands of pounds. We can help in protecting your assets from the taxman. We give the very latest inheritance tax planning information, including all the changes announced in the March 2008 Budget and October 2007 Pre-Budget report.
