inheritance tax There is an issue that many people often have to struggle until death in the family.
Still the basics of heritage Tax Can be financially intelligent, Particularly with some changes introduced in the budget of autumn.
Rame Holland, a financial planning partner of an accountancy firm Albert Goodman, noted that the subject is under constant investigation.
“Heritage Tax One of those areas that are always in the headlines, and it appears to be a popular point of discussion at this time, “she explains.
Waiting for the budget announcements of October/November, Ms. Holland advises caution.
“We will see what happens in the time of October, November, but I will always say, do not make any grain decisions. Take advice before doing anything.”
Ms. Holland explains inheritance tax, which may be exempted from paying inherited tax, what tax you may have to pay, and what changes can Chancellor Rachel Reves make.
How does inheriting work currently work?
“Every person has a zero rate band of £ 325,000, which means you can have Property The price of up to £ 325,000 and is not responsible for any heritage tax (IHT), “Holland explains.
It’s only on Property It is more than this that you have to pay inheritance tax, which is 40 percent of the threshold as a standard.
Is there any discount?
Yes, especially if you are married or in a civil partnership. “A fickle discount means a husband and wife [for instance] Holland says, “Each other can leave everything, and no one will inherited.
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“It will only be due to the second death, the point at which both of those allowances [of £325,000] Can be combined. ,
Other discounts include “trade property relief and agricultural property relief if you are in farms and wealth” and include your property for a donation or a community amateur sports club.
Says Holland, “The main habitat is another discount called indigo rate band, which is £ 175,000 for married couples.” “One of the conditions for having additional allowance is to be left to direct linear descendants, so children and grandchildren.”
What about the gift?
Gift is the place where things become more complicated. “In most circumstances, there is no inheritance tax due to the value of gifts given for seven or more years before dying.
However, if you die within seven years for money or any other property from your property, your loved ones may have to pay heritage at the value of those gifts, “Claire,” Claire Accele, Financial Advice, and Head of Guidance in Nutmeg.
“When you gift the property and its value to how much, it will depend on how much.”
This inheritance is a relief tamper. “If you die within three years for money or property, IHT The rate will be 40 percent, this rate decreases every year, eventually reaches 0 percent when it survives for seven years, ”Accele says.
There are rules about how much gift you can also give – about 3,000 pounds in the same tax year, with multiple small gifts, even up to £ 250 per person. Birthdays and Christmas are presented.
Also, you cannot request gifts. “If you are making a gift, you need to give it completely and there is no benefit,” Holland says.
Are two possible changes being proposed?
Holland says, “One of the things that the government has looted in summer is putting a hat on how much gift can be given, and this hat can be somewhere between £ 100,000 and £ 200,000,” Holland says.
The second change that the government has talked about is removing the taper. “If you die at any point during those seven years, the full 40 percent IHT would be charged at the value of that gift,” Holland noted.
What can it mean for individuals?
Assuring Holland, “In a grand plan of things, these two changes in the value of gifts of lifetime will affect those at the high end of the wealth. Everyday person will not be influenced by a lifetime hat on gifts,” assures Holland.
“However, if you couples them with some changes that are probably becoming effective in the next two years, such as treatment of pension, and also, if you are a businessman, it can then affect more people.”
What can you do to prepare?
Holland recommends looking at your finance and talking to an independent advisor so that you can inform about your options and decide that “there is any scope to use surplus assets to make gifts” first “first.
“If someone is going to be inherited, and you want to maintain a family house, you can see an insurance policy to pay the cost,” they say. “You may want to ask your children, if they are beneficiaries, to pay the cost of insurance instead of yourself.”
He also suggests to review your wish to ensure that it “reflects your property correctly”.
Exley says that you can also consider making regular payments to loved ones. “She has no limit to the value of regular payment that you can do to another person, for example if you are helping their living costs,” she notes.
“These are known as ‘General Expenditure Outside of Income’, but may include things such as rent or payment of mortgage for your child, contributing to saving account or junior ISA for a child under 18 or providing financial assistance to an old relative, perhaps to help the cost of care.”
Don’t forget to live your life
“The most important thing is that you are taking care of yourself, making sure you got enough money and property to do everything you wanted to do.
Holland says, “I want to help the family, but do not compromise on your retirement because you are trying to defeat a tax – to live life,” Holland says. “Enjoy your money. You have really worked hard for this.”