The Inheritance Tax Act 1984 introduced the current form of inheritance tax to replace capital transfer tax, although it has further evolved since that point. The current form of inheritance tax has the following effects:
- A nil-rate band of £325,000 as at 2012/13 in terms of the worth of an estate – no tax is paid on this portion.
- A 40% taxation rate levied on the excess.
- Tax levied on gifts within the past 7 years that are not covered by exemptions.
There are numerous exemptions available, for certain kinds of gifts in the past 7 years and for the immediate handling of the existing estate of the deceased. The Inheritance Tax Act 1984 allows for numerous methods of avoiding inheritance tax, such as placing money in trusts, although in the intervening years various tax avoidance schemes and methods have been countered by HM Revenue & Customs.
If you are concerned that there may be tax to pay on your estate when you pass away, then it is worthwhile getting into contact with qualified experts to help you prepare your assets and legacy. Fill out our enquiry form and you will be put in touch with a group of professional UK financial consultants, who are offering a free, no obligation initial consultation.