Need Expert Financial Advice?

  • This field is for validation purposes and should be left unchanged.

or Call Us at: +852 3728 0490

Introduction

Inheritance tax (IHT) is a tax charged to a UK domicile’s estate when they die. It can also apply to certain gifts you might have made during your lifetime. Exactly who will be liable for IHT is a complicated matter but, in very general terms, it will apply to those living in the UK at the time of death, and some who have previously lived in the UK. An individual’s domicile can be very difficult to shed, regardless of where you are residing. Your estate is basically everything you own in your name or your share of everything you own jointly. It includes your main property, any additional property, cars, boats, life assurance policies, any investments, any personal effects such as jewelry, any assets held in trust which you can benefit from, and any gifts made where you keep back some benefit (gifts with reservation).

Things to consider

– Make a will: An effective will could help to reduce your IHT bill.

– Look into exemptions: There are a number of exemptions you could use to reduce the value of your estate. For example, moving assets between spouses or registered civil partners does not create an IHT liability.

– Consider gifts: If you can afford to give away some of the assets that you own, it may be possible to reduce the size of your estate.

– Think about life assurance: A life assurance plan won’t actually lessen the IHT bill, but the proceeds could be used to help pay the bill on death if written in an appropriate trust.

– Consider trusts: If structured carefully, trusts can help to reduce or even eliminate your IHT liability.

Summary

Estate preservation doesn’t only affect the very wealthy. Rising property prices have meant it’s now an issue for an increasing number of people. In order to protect family and loved ones, it is essential to have provisions in place after you’re gone. The easiest way to prevent unnecessary tax payments such as Inheritance Tax (IHT) is to organise your tax affairs by obtaining professional advice and having a valid will in place to ensure that your legacy does not involve just leaving a large IHT bill for your loved ones. IHT is often called a voluntary tax because, with careful planning, the amount your estate has to pay could be reduced or removed completely. From writing a will, to understanding the exemptions and making lifetime gifts, there are several options to help mitigate IHT.

Get Personalised Financial Planning Advice

 

For more interesting and useful articles, click on the links below:

Additional Information Resources

Additional information resources are available by clicking on the links below:

You can also view information related to your particular stage of life: