13:21 03 March 2013
Inheritance tax is £325,000. This means that if your estate is valued at that amount or over, your survivors will need to pay up to 40per cent of your estate value in the form of inheritance tax. There is an easy way to avoid that threshold without any drawbacks.
•First you must ensure that you leave your estate solely to your civil partner or spouse. This type of transfer is exempt from the inheritance tax.
•Secondly your spouse or civil partner will enjoy the benefit of a more secure lifestyle, and their threshold is combined with yours. Your survivors will not need to pay inheritance tax if the value of the combined estates upon the death of your spouse or civil partner is less than £650,000.
This is a good step to take because it not only ensures financial security for your surviving spouse or civil partner, but it also gives you the opportunity to help them while avoiding the inheritance tax altogether.
Transferring an estate can offset cost of living expenses and increases due to inflation or other common issues such as declining health. Medical issues and the need for specialized care, including possible in-home care may deplete the estate value enough so that when the spouse or civil partner dies, the rest of the family will not need to worry about paying an inheritance tax.
There are also other reasons your heirs may not need to pay inheritance tax, but it is best to contact an Independent Financial Advisor who can see if you qualify for any particular exemptions that might exist. Depending on the type of property you own, and its use, you may even qualify for a reduction in the tax amount.
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