What is inheritance tax?
Inheritance tax is paid by on your death, meaning the people you chose to leave your assets to could potentially get less than you want them to as the taxman will get their share first.
The general rule is that tax is charged at 40% on estates worth more than £325,000. However, if the assets are inherited by a spouse or civil partner or a charity then there is no Inheritance tax payable.
However, any gifts you make in the seven years before your death can be counted towards the £325,000 limit.
Can you avoid paying inheritance tax?
There are certain things you can do to make gifts during your lifetime and thus reduce your estate on your death. However, you have to make sure you carefully follow the rules in doing this so that you don’t incur additional tax and penalties for getting it wrong.
HMRC have released some guidance regarding the gifts that can be made.
For more help and advice on this matter ring our Wills and Probate team today on 01302 341 414.