11:15 28 February 2013
Not everyone is required to pay inheritance tax, and you may qualify for exemption based upon a number of different possibilities. Why throw away funds that could be of significant value to your loves ones, when you don’t have to?
Here’s what you need to know about these exemptions, but remember to consult an IFA for any additional concerns:
•Gifts can sometimes be subject to an inheritance tax with a few exceptions. You are able to give up to £3,000 away per year total, or gifts of less than £250 to any number of individuals. These are actually two separate exemptions: the first falls under an Annual exemption and includes lump sums and the latter is a Small Gift exemption.
•Gifts given more than seven years ago are typically not included when determining inheritance tax, and are referred to as potentially exempt transfers.
•Charitable contributions, to approved entities, are exempt. Charitable contributions designated within a will are also included in this and will also reduce the value of your estate. If you are near the £325,000 mark for the value of your estate, this is a beneficial way to use your funds to help others, and ensure your loved ones won’t need to pay inheritance tax.
•Anything you leave to a civil partner or spouse, as long as they reside permanently within the United Kingdom, is not subject to an inheritance tax even if the value of the estate is at or greater than the threshold.
•Certain property uses reduce amounts or possibly exempt you from paying an inheritance tax. If your property was used for a business, as a National Heritage property, woodland or even a farm you may be granted some relief from the tax.
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