Want to know your inheritance tax liability?
- 20th August 2008
- Property Tips
Many people who invest in property as part of their retirement or inheritance planning, fail to take advantage of tax savings.
There are a number of issues with inheritance tax that are worth looking at.
- a person can gift up to £3,000 a year to any individual without being liable for any inheritance tax on it. Any amount above that is liable for tax if you die within seven years of gifting it. This obviously makes gifting a house difficult.
- inheritance tax is charged on estates worth over £600,000 on death
- An individual has a tax allowance of £300,000 but couples can combine the allowance to escape the first £600,000 of inheritance tax.
- By 2010 this amount will be raised to £700,000.
- The following don't count as part of an individuals estate: gifts to political parties, any agricultural or business assets, any monies gifted to charity, any gifts made seven years prior to death, all gifts to your spouse.
If you are worried that your estate will be eligible for inheritance tax, remember only around 7% of the UK population pays it, there are a few options available. It is possible to set up trusts to pass on assets to your children. Advice from a taxation expert should be sought. If you have insurance policies you should think about placing them in a trust so they're not classed as part of your estate. Alternatively it is possible to set up an insurance policy to cover the bills your heirs may have to pay.
Always seek professional advice first.
FREE & INSTANT PROPERTY VALUATION
IN JUST 60 SECONDS