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TAX TIP TUESDAY: Do You Understand IHT and the Implications? Take the Quiz

Our 5-minute read – Tax Tips – for UK doctors and dentists will help you save tax, get organised with your tax affairs and make sure you meet important deadlines with ease.

This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. The Financial Conduct Authority does not regulate tax advice. 

Do you think that you know all about Inheritance Tax and how it could affect you? A recent survey conducted by HMRC proved that the public’s knowledge of IHT is a bit more elusive than you might think.

IHT is often cited as “the most hated tax” in the country despite only affecting less than 5% of deaths(fewer than 25,000 estates.) However, a review by The Office of Tax Simplification concluded there the government could simplify the sometimes overcomplicated rules of IHT which might remove the stigma surrounding the tax.

IHT Review

Inheritance Tax is a tax paid on the estate (property, money, and possessions) of a person who has passed away. There are a few circumstances where you won’t pay IHT, however, once the value of your estate goes over this maximum, anything above is charged at the standard tax rate of 40%.

There are also ways to reduce your tax liability.

Test your knowledge

While over half of the respondents answered five or more questions (out of 8) correctly, roughly only one-third were confident in their answers, meaning there was a lot of guessing going on. As a result, the portion with an actual “high knowledge” was just one in four. Do you think your knowledge of IHT is up to scratch?

Can you answer True or False to these statements about IHT?

If you answered true for the first 6 statements and false for the last two, congratulations! You’re well-versed in the rules of IHT.

If you need to brush up on the ins and outs of IHT – and how to maximise your tax-free allowances, speak to one of our team members to discuss your estate.

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