Inheritance tax laws
Inheritance tax laws in England and Wales can be complex and it is always worth getting a solicitor to assess your assets, so you know how much inheritance tax will have to be paid on your estate after your death. By tax planning before your death, you can save your loved ones many thousands of pounds, whilst working within the allowances set by inheritance tax laws.
Inheritance tax is a tax that takes effect on death. When a person dies, inheritance tax is charged on the value of the estate at the time of death, subject to exemptions and reliefs. Inheritance tax laws are always changing to encompass the ways people attempt to avoid paying inheritance tax. As an example of this, gifts made within seven years of death will become chargeable to inheritance tax. The theory behind this is that it prevents people giving away their estate before death to avoid paying tax on it.
There are many ways to avoid paying inheritance tax, and in order to utilise these breaks it is worth contacting a solicitor who can advise you on the lifetime gifts that you can make that will not be chargeable, trusts that can be set up that won’t be subject to inheritance tax, or other methods suited to your particular needs.
Inheritance tax laws allow an individual to have a nil-rate band. The nil-rate band is the amount of money in your estate on which you will pay 0% tax. The nil-rate band is currently £312,000 so if your estate is worth less than this no tax need be paid. Over £312,000 however, tax is chargeable at 40%.
If you would like to obtain legal advice on inheritance tax laws, Contact Law can put you in touch with a local specialist tax solicitor free of charge. So, if you have any questions or would like our help in finding local tax solicitors please call us on 0800 1777 162 or complete the web-form above.
- Last Updated on 02/03/2010