14:21 06 March 2013
Retirement is supposed to be the time of your life dedicated to relaxing and enjoyment. Ideally, it should be stress-free and financially secure. Ironically enough, if all of this happens to be true for you, the chances are your heirs may have a lot of inheritance tax to pay.
Here are a few things which aren’t charged inheritance taxes to help you plan for the future.
1.Gifts (large lump sums of money) that have been given at least 7 years before your death.
2.Certain types of Trust funds are exempt from inheritance tax, but may be subject to income tax.
3.Anything left to a spouse or civil partner is not subject to inheritance tax.
4.Annuities that do not pay money to heirs/beneficiaries.
While this is not a comprehensive list it should give you a basic idea of a few things which are not subject to inheritance tax. Regulations can change, however, so it would always be in your best interest to call the inheritance tax hotline to receive the move current information to ensure accuracy in your planning.
If you believe you will be subject to inheritance tax, you can also consider donating a lump sum to certain approved charities based within the United Kingdom. Approved charities should have a HM Revenue & Customs (HMRC) reference number to give you.
Donating a lump sum may not entirely exempt you from paying inheritance tax, but it may qualify you for a reduction in the rate of inheritance tax you need to pay. The typical rate for inheritance tax is 40per cent, but depending on circumstances you may be able to take a lowered rate of only 36per cent.
Contact the inheritance tax hotline for any specific questions.
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