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INHERITANCE TAX GUIDE


               INHERITANCE TAX GUIDE

               Many people are under the mistaken apprehension that Inheritance Tax is a tax on the wealthy. This statement
               might have been accurate when it was first introduced in the 1970’s but due to recent surge of property prices it
               can no longer be relied upon.



               If we have thought about Inheritance Tax many of us have concerns that any property we leave on death will not
               go to our family as we would wish, but instead will find itself in the tax man’s pocket.


               Unfortunately paying our taxes is a fact of life. Inheritance Tax, however, is slightly different as with a bit of
               forward planning many people will certainly manage to reduce, and in some cases completely avoid, their liability
               to Inheritance Tax. Exemptions and reliefs to the tax can be constructively used to minimise liability.


               WHAT IS INHERITANCE TAX? (IHT)

               IHT may be payable on an individual’s estate on death or on certain gifts made during lifetime. The tax legislation

               states that IHT is payable on chargeable transfers of value made by persons during their lifetime or on death. For
               IHT purposes when a person dies they are deemed to have made a transfer of all their property. Although some
               people may become liable for Inheritance Tax during their lifetime as they have made lifetime chargeable
               transfers (this will be explained later in the guide) the majority of people will only become liable to pay IHT on
               their death.

               WHO PAYS INHERITANCE TAX?


               IHT is payable by people who are domiciled in the UK. If you have the UK as your permanent home all of your
               assets, with a few exceptions, will be subject to IHT. Please note that even if you are not domiciled in the UK, any
               assets held in the UK will be subject to IHT.


               WHAT RATE OF INHERITANCE TAX IS PAYABLE?


               Currently the rate of tax chargeable on lifetime transfers is 20%. The rate of tax on death is 40%. These rates are
               subject to change.


               IHT will only become payable if the chargeable transfer exceeds the Nil Rate Band (NRB). The NRB tends to
               change at the start of every new tax year. Currently the Nil Rate Band limit is £325,000. Any estate greater than
               this could become liable to inheritance tax.


                More detail on rates and other information can be found here :-



               https://www.moneyadviceservice.org.uk/en/articles/a-guide-to-inheritance-tax

               SOME GOOD NEWS





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