Inheritance tax is a tax that everyone wants to reduce and, in many cases it is possible to reduce and even completely avoid, whilst remaining above board. It takes planning though. Here are a few facts and figures to be aware of.
Inheritance tax planning is long term – start now
Inheritance tax (IHT) planning is long term as it requires time to be effective. Ensure you are doing what you can to reduce or even mitigate this tax so more of your wealth can be passed onto your loved ones.
2014/2015 relevant facts and figures
- The first £325,000 of your Estate is taxed at 0%.
- Assets over £325,000 could be subject to tax at 40%
- You can gift money to your family whilst alive but you must survive 7 years for these to be tax free, else they will be subject to IHT
- Although, everyone has an annual IHT allowance of £3,000, so this amount can be gifted every year, tax free
- If your children get married you can gift up to £5,000 (in addition) and it will be free from IHT
- If your grandchildren get married you can gift up to £2,500 (in addition) and it will be free from IHT
If you have excess income each month there it is worth considering making regular payments to your children through your life. Sign up to our newsletter to be sent further news regarding IHT planning.