Tax law makes up one of the most complex areas of the legal system. As such, proper tax planning can make all the difference when dealing with wills and inheritance. Wills and probate lawyers know what they are doing when it comes to tax law and inheritance money. Inheritance tax (IHT) is the amount of tax charged on the deceased person's assets or estate. IHT is charged at about 40% after a specified rate, which can be a huge amount of money. With high earnings and high inheritance in the city, wills and probate lawyers London have the experience to guide these kind of cases.
Inheritance tax - basic information
First of all, IHT does not apply to everybody. It is only applied if your inheritance including assets in trust and gifts is over a certain threshold. The 40% (ish) tax is payable on the amount that goes over this baseline. There can be cases that are exempt from IHT:
Spouse/civil partner exemption - Your estate won't usually be charged IHT on anything left to a partner or spouse who is a UK resident permanently. This also applies to gifts made to them in your lifetime.
Charity exemption - Gifts made to a charity that qualifies during lifetime or in your will shall not be subject to IHT.
Potentially exempt transfers - Survival after seven years of giving someone a gift means that gift will then be exempt from IHT.
Small gift exemption - Gifts of up to 250 you are allowed to give to as many people as you want to.
Annual exemption - You are allowed to give away up to 3,000 every year as a gift or gifts.
Wedding gifts - Gifts up to a specified amount to a couple that are getting wed. Also applies to civil partnership.
Business, Woodland, Heritage and Farm - When the deceased owned a business, farm, woodland or National Heritage property, some relief may apply.
When it comes to the payer of the IHT there can be complicated law to navigate, so wills and probate lawyers are good for this. Generally the IHT is paid by the executor or the personal representative of the deceased.
If you are writing a joint will with a partner or spouse, the law pertaining to inheritance tax can be quite tricky so for these instances in particular it is recommended to consult wills and probate lawyers to guide you through the process.
Inheritance tax - basic information
First of all, IHT does not apply to everybody. It is only applied if your inheritance including assets in trust and gifts is over a certain threshold. The 40% (ish) tax is payable on the amount that goes over this baseline. There can be cases that are exempt from IHT:
Spouse/civil partner exemption - Your estate won't usually be charged IHT on anything left to a partner or spouse who is a UK resident permanently. This also applies to gifts made to them in your lifetime.
Charity exemption - Gifts made to a charity that qualifies during lifetime or in your will shall not be subject to IHT.
Potentially exempt transfers - Survival after seven years of giving someone a gift means that gift will then be exempt from IHT.
Small gift exemption - Gifts of up to 250 you are allowed to give to as many people as you want to.
Annual exemption - You are allowed to give away up to 3,000 every year as a gift or gifts.
Wedding gifts - Gifts up to a specified amount to a couple that are getting wed. Also applies to civil partnership.
Business, Woodland, Heritage and Farm - When the deceased owned a business, farm, woodland or National Heritage property, some relief may apply.
When it comes to the payer of the IHT there can be complicated law to navigate, so wills and probate lawyers are good for this. Generally the IHT is paid by the executor or the personal representative of the deceased.
If you are writing a joint will with a partner or spouse, the law pertaining to inheritance tax can be quite tricky so for these instances in particular it is recommended to consult wills and probate lawyers to guide you through the process.
About the Author:
Wills and probate lawyers are worthwhile talking to if you wish to understand more about Inheritance Tax planning. Lewis Nedas presents professional wills and probate lawyers London, for all the guidance you could need
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