When Do You Have to Pay Inheritance Tax?

In the UK very few people pay inheritance tax as the amount without fees is relatively high, however as house prices rise the amount of people paying inheritance tax is set to rise also. The current limit of tax-free inheritance is £325,000 but this is set to rise to £500,000 in the near future. Any inheritance above that amount will incur a tax of 40%. If you are to come in to some inheritance, it is best to hire a professional accountant Kent to help you with the regulations and make sure you are getting the most out of the finances but also following the rules.

Giving Gifts

Gifts of property, finances and assets can be passed on tax-free as long as the provider survives for 7 years after the gift date. If the individual dies before the 7 year period, there are certain rules that apply to the amount of tax that must be paid and the period of time that has past. There are other rules that apply to specific gifts such as wedding presents; funds can be given to children, grandchildren and friends tax-free up to a certain limit.

Setting Up Trusts

Parents can set up trusts for their children and other family members, but inheritance tax will still be charged at 20% for funds above the tax-free limit. Assets and finances within the trust must be reassessed every 10 years to make sure values are equal to the latest rates.



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