News Archive - June 2007
Inheritance Tax
01/06/2007Inheritance Tax (IHT) is a tax payable on your estate (the total sum of your assets, less any liabilities) on death.
Although previously seen as a tax on the rich, thanks to rising house prices (and the Government's failure to increase the IHT tax-free allowance in line with them),
it has become a potential problem to millions.
Ironically, the rich (and super-rich) generally avoid paying IHT due to the careful use of trusts and tax planning. It is ordinary people who are being caught out, due to lack of knowledge or a reluctance to act. Thinking about death is not a pleasant subject. However, it is an inevitable part of life. By making arrangements now, you will be helping your nearest and dearest to cope without you in the future.
If you died tomorrow, would your estate be worth more than the 2007/08 IHT threshold, which is £300,000? (You need to include the value of your house and any other UK properties you own, your savings and investments, personal possessions and also the proceeds from life insurance policies. Then deduct any unpaid debt, such as loans or mortgages).
If so, your surviving family could face an immediate tax bill of 40% of the excess over £300,000.
Would you pay tax if it was optional? No, I didnt think so.
This is a tax which is easily (and legally) avoided by putting a few measures in place. Please give us a call if you would like to discuss IHT and how we can help.