Everything You Need To Know About Inheritance Tax

You work hard all your life , so it’s important you put some plans in place for your family, especially children should you pass away. It may seem like a morbid subject but inheritance tax doesn’t just affect the rich. Your estate isn’t just made up of money you have, it’s also made up of cars , property and antiques and so forth. If your total estate is made up of more than £325,000 then legally whoever inherited your estate would likely pay an inheritance tax bill. The Lost Coin Financial planning has professionals at hand to provide advice and help planning for the future.

What is Inheritance Tax?

Anything you own in life which makes up your estate such as cars, money, properties, possessions and investments inheritance tax will be applied when you become diseased. There will be some leniency but once these are taken away the out of 40% is applied. We in the uk have one of the inheritance tax rates coming in at 40%, last year HMRC gained over 6 million in inheritance tax receipts.

Who will pay Inheritance Tax?

Property prices and the value of certain assets change regularly, but these days we only see the value of most things going up, even living a fairly simple lifestyle you may still find yourself responsible for inheritance tax. If the amount is above the threshold then you will find yourself responsible and must pay inheritance tax.

Gifts

Inheritance and gifting You are allowed to gift your assesses to people but you may find it’s a good idea to gift them at least 6/7 year before you pass, there are obviously rules and regulations when it comes to gifting any assets , gifts to the vale of £250 or less as birthday gifts , wedding gifts or to any sort of charity are absolved.

Working out if You Need to Pay Inheritance Tax

You can do this by estimating the full value of the estate that you are going to inherit.

1.The value of assets they owned
2.Any gifts made 7 years before they died
3.Any assets in trusts
The allowance for a single person is £325,000 and a married couple is £650,000

Reducing the amount of inheritance tax you pay

Although the whole inheritance tax process may seem daunting and scary there are things you can do to reduce the amount your beneficiaries may pay.

1.Spend your money
2.Gifting and assets you own
3.Put your money into a pension
4.Invest in inheritance tax favoured investments

The right option for you

The most important thing is making the right decision for yourself, all options have positives and negatives. You may find that mixing a few of the options may work out in your favour. We definitely recommend planning in advance and getting the ball rolling helps ease your mind and set your children or spouse up for the future. The Lost Coin Financial Planning is on hand should you need any expert advice when planning for the future.

Categorised in: Inheritance Tax, Investments, Positive Impact

This post was written by duodigitaluk@gmail.com