INHERITANCE TAX

These days more and more people are falling into the trap of Inheritance Tax (IHT). At one time this tax was considered to affect only the very rich and not something that the ordinary person need to consider.

Inheritance tax is based upon the value of your estate; this is defined as the assets you own less the debts you owe at the date of death.

However with the current value of houses, particularly in the South East of England the spectre of Inheritance Tax is looming for every family in the UK. Currently (2008) we are looking at house prices falling and this will help to take some people out of having to pay Inheritance Tax.

The rate of Inheritance Tax is 40%. However, the first £234,000 of your estate may be free of tax. You only pay tax on what the estate is worth above that £234,000.

You can see how some people with very little money may be living in a property which make them liable to pay Inheritance Tax.

It is also important to know that any tax due has to be paid in full before probate on the estate is granted. If Inheritance Tax is due to be paid because of the value of a property, then that property may have to be sold before any of the beneficiaries of an estate can receive any money!

It is very important that people take steps before a death occurs to protect a surviving spouse and other families. They should also take steps, all totally legal, to ensure that the amount paid in Inheritance Tax is the least possible within the law.

If you would like some professional advice on these steps then click here to contact us for professional advice.