If the worth of your estate is over £312,000 – an increasingly common situation as property values continue to rise – then you may be concerned over how to avoid inheritance tax when you die. The tax imposed on assets over the £312,000 nil-rate band is a huge 40%, which can seriously reduce the legacy that you leave behind to provide for relatives and children.
There are various methods available when considering how to avoid inheritance tax:
- Your will is key – make sure that the will is legally secure and correct to help reduce the burden that inheritance tax may impose.
- Even division of assets with a spouse or civil partner can help reduce the tax that either of you may need to pay.
- Make wise use of the tax exemptions available. This requires forwards planning to best exploit the ability to give certain sums as gifts each year, and to use PETs (potentially exempt transfers) which are gifts that become exempt from tax if you survive for seven years after bestowing them.
- A spouse can inherit your estate without being taxed, although this increased single estate may result in greater tax charges for any children or other inheritors after the spouse passes away.
- Life assurances and trusts can be used to provide inheritance tax-exempt sums of money for beneficiaries in the event of your death.
If you want to know how to avoid inheritance tax on your estate then seek expert financial advice. Fill out our enquiry form and we will put you in touch with a group of professional UK financial consultants who are offering a free initial consultation for inheritance tax matters to help you navigate this complex area of financial planning.