Who pays inheritance tax?
The answer is that an increasing number of UK residents are finding that they are eligible for inheritance tax to be levied on their estates after they die. This is obviously a great concern, as it can significantly reduce the inheritance that is left for family and other beneficiaries.
The following guidelines can be applied to see who pays inheritance tax:
- The nil-rate band for inheritance tax is currently £312,000. This means that anyone with an estate with the assets valued at this amount or less will pay no inheritance tax. As the threshold of the nil-rate band is not advancing at the same rate as rapidly rising property values, this means that more and more people find they are being pushed over the nil-rate band by their homes and houses.
- Value in excess of the nil-rate band has a 40% tax rate imposed on it.
- Importantly, many gifts and asset transfers from the seven years leading up to the subject's death can be included as part of the estate for the purposes of taxation.
- There are numerous exemptions and special conditions on gifts, donations and transfers that can help reduce the taxable value of the estate.
For details and specifics from an expert on who pays inheritance tax – and whether you will be one of those people – fill in our online enquiry form. We will put you in touch with qualified UK financial consultants who can give you a free, no-obligations initial consultation.