Independent financial advice - inheritance tax
Take independent financial advice to find out more about inheritance tax
Inheritance tax
Inheritance tax is a form of death duty and affects a growing number of people in the UK - mainly because Inheritance Tax thresholds have not risen in line with house prices. Inheritance Tax is payable by your executors, and the current threshold at the time of writing is £285,000. Anything over this sum will be charged at 40% unless you are leaving it to your spouse or Civil Partner who is resident in the UK. Take independent financial advice to find ways of avoiding inheritance tax, but the basics are:
- Gifts should be given seven years before you die
- Each spouse or Civil Partner should use their £285,000 tax-free threshold
- Set up a discretionary trust
- Will your estate to a charity or political party - they are exempt
Civil Partnerships
Since the Civil Partnership Act of 2004, gay and lesbian couples now enjoy the rights of married couples, including Inheritance Tax. From 5 December 2005, same sex couples have had the right to have their relationships legally recognised. Anyone who registers a civil partnership now has the same rights as a married couple in areas like tax, social security, inheritance and workplace benefits. If you plan a civil partnership, take independent financial advice to find out how your financial position may alter.
When is Inheritance tax payable?
If you have been nominated as someone's personal representative (executor) you have to value all of the assets that the deceased person owned. This valuation must accurately reflect what the assets would reasonably fetch in the open market at the date of death. In most cases, Inheritance Tax must be paid within six months from the end of the month in which the death occurs, otherwise interest is charged on the amount owing. Tax on some assets, including land and buildings, can be deferred and paid in installments over 10 years, so take independent financial advice to see which time limit applies.
If the estate is likely to be subject to Inheritance Tax
Take independent financial advice about completing form IHT200 plus any relevant supplementary forms (these are indicated on the IHT200).
You also complete :
- form D18 if the deceased person lived in England, Wales or Northern Ireland
- probate application form PA1 if the deceased lived in England or Wales
- form C1 Inventory if the deceased lived in Scotland
(In Northern Ireland you only complete a probate application form at interview.)
You can have a brighter financial future. If you would like independent financial advice about bridging loans call our experienced advisers today on 0870 803 1995 or e-mail mike.robertson@mraltd.com
