16:55 27 February 2013
Trust and inheritance tax can be extremely complicated for a lot of people. If you’re thinking of transferring your assets into a trust, it’s important that you at least understand the basics of trust and inheritance tax.
Here are the basics you need to know:
•Inheritance tax on trusts can be payable during your lifetime. This is different with other assets where tax is due the moment you pass away.
•Inheritance tax is only due if your estate is more than £325,000. Equally, if IHT is not due if you leave your assets to your surviving spouse. In addition, if your estate does not use NIL rate band, the tax free allowance of your spouse will be increased.
•You may reduce the amount of IHT by simply giving away £3,000 per year to other people up to £250 each.
•IHT isn’t due on trusts if it is for a bereaved minor or disabled dependent.
•Other assets held in trust can be exempted from IHT like government securities and properties held abroad.
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