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bigduckontax
bigduckontax, Accountant
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How can I avoid paying inheritance tax?

Resolved Question:

how can I avoid paying inheritance tax?
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. Always bear in mind Benjamin Franklin's quip that in life there are but two certainties, death and taxes. Inheritance tax (IHT) is levied at a flat rate of 40% on all assets over 325K on decease. This 325K limit is inflated by any inter spousal, charitable ond certain other bequests [to political parties]. If you leave everything to your spouse there is no IHT due and when they pass on they can inherit any of your unused 325K making 650K a possible tax free area. So one way to reduce tax is by giving to either your spouse or charities. If 10% or over of your will is charitable bequests then the rate of IHT drops to 36%. From 2017 the house you leave to your children will raise the 325K limit from its present level to a million by 2020. You can give away assets in your lifetime and provided you survive seven years these gifts escape taxation and are not added back to your estate. However, even if you do die within seven years of making a gift, there are a range of other exemptions worth taking into account to help lessen the tax bill: You can give £3,000 away each tax year inheritance tax-freeGifts to charities and political parties are inheritance tax-freeYou can give £250 each year to everyone you knowGifts in consideration of marriage are tax-freeIf you own a farm a percentage may be exempt from IHT.' MoneySavingExpert.com has an excellent summary here: http://www.moneysavingexpert.com/family/inheritance-tax-planning-iht I do hope that I have given you some food for thought.
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Expert:  bigduckontax replied 1 year ago.
Thank you for your support.