This simple inheritance tax guide outlines the broad concepts involved in inheritance tax (IHT), and whether your estate might be liable for taxation after you pass away. IHT has affected a larger segment of the UK population as housing prices have risen out of line with the IHT nil-rate band, and a greater number of homeowners are now facing a significant charge on the estate that they were intending to leave to their family and children.
Inheritance tax is charged along the following lines:
- The first £325,000 as at 2012/13 of estate value is the nil-rate band, and is not taxed.
- Value in excess of this band is subject to a 40% tax rate.
- Gifts made within the last seven years are subject to IHT.
- Numerous exemptions exist such as an annual £3,000 gifts exemption, which can be used to reduce the total sum of assets that are subject to IHT.
- Spousal exemptions mean that a spouse or civil partner can inherit the entire estate without IHT.
Inheritance tax can be a complex matter and this simple inheritance tax guide can only provide the basic information. By filling out our short enquiry form, you can get in contact with professional UK financial consultants who are offering a free first consultation with no obligations, to provide you with more in-depth information on inheritance tax and your circumstances.