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The necessity to pay, or the amount to be paid, in Inheritance Tax depends on a number of factors:
• The value of assets and property left within an estate;
• The value of any trust from which the deceased benefited;
• The value of any gifts given by the deceased during the seven years prior to their death.
If these amounts fall over the nil rate band, Inheritance Tax will be charged at 40 per cent on any amount above the band. This band is reviewed every year.
Gifts made between married couples or within civil partnerships are exempt from Tax.
All gifts between husbands and wives are exempt from tax, as are those between same-sex partners in a registered civil partnership. Other exempt gifts include:
• A single gift of £3,000 each year
• Any number of ‘small gifts’ of under £250 each to different people
• Gifts to charities or political parties
• £5,000 to your child if they are getting married; and
• Gifts that can be described as ‘normal expenditure’ out of your income.
Specialist legal advice should always be sought when dealing with Inheritance Tax.
In the event of seeking this advice as an executor, the cost will be paid out of the estate. Mistakes made without the help of legal advice could be costly as any discrepancies in Taxes paid may have to come out of the executor’s own pocket.
Please call us free on 0800 043 2811 for further information.
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