Inheritance tax

Are you concerned regarding inheritance tax?

What is inheritance tax?

Inheritance tax is a tax on an estate (being the property, money and possession) of someone who has died. As a Personal Representative you are responsible for reporting the estate value to HMRC.

How much is it?

The standard rate is 40%. It is only charged for the estate which is above the threshold. Please note that the rate does change from time to time and therefore we would recommend that you contact us as it may have changed

What is the tax paid on?

Inheritance tax is payable on estates whose value exceeds a certain amount (or “threshold”). The threshold changes from year to year and is currently £325,000 per person. Anything left to a wife, husband or civil partner can usually be taken off the value of an estate for the purpose of calculating the inheritance tax due, provided certain conditions are met.

Even where the threshold may appear to have been exceeded, thanks to recent changes in the law, there may still be some flexibility as portions of a nil-rate band allowance can be transferred between spouses or civil partners on the death of the second of the couple. There are complicated rules surrounding this and we are able to provide you with appropriate advice in this area.

Does it matter that some gifts were made prior to death?

Some gifts a deceased has made prior to their death may still be counted as part of the estate. Please contact us for more details.

Are there any reliefs or exemptions?

Yes there are. On some gifts made prior to death may be eligible for Taper relief meaning that less tax is charged. Also there is some business relief to allow to assets to be passed free of inheritance tax or reduce the bill.

There is also agricultural relief which may be applicable.

Who pays the tax?

The funds from the estate are usually used to pay the Inheritance Tax to Her Majesties Revenue and Customs (HMRC). This is done by the Personal Representative.

If you have any questions regarding inheritance tax or you wish to see how inheritance tax may be reduced or limited, then please contact us.

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If you would like to get in touch with us please either call us on 01629 56660 or make a Free Online Enquiry.

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