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7 Ways To Avoid Inheritance Tax In The UK

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Inheritance tax comes into effect when a person dies and their estate passes to their heirs. But what can you do in order to ensure that your estates stays away from UK inheritance tax? In this article, we outline 7 ways to stay out of IHT.

Inheritance tax is one of the taxes that you will have to pay when you inherit money or property. It is important to be aware of the ways that you can avoid inheritance tax in the UK.

Here are seven tips to help you avoid inheritance tax:

  1. Make a Will

If you want to leave anything to your heirs, make a will. This will help to ensure that your assets are distributed according to your wishes. If you don’t have a will, your estate may be divided among your children according to law instead of what you would have chosen.

  1. Get Creative With Your Inheritance Tax Strategy

There is no one-size-fits-all inheritance tax strategy. You will each have to decide what is best for your situation and make adjustments as necessary. Some people choose to give their assets directly to their heirs without involving any taxes. Others may choose to sell their assets before they die and use the money from the sale to reduce their inheritance tax liability. There are many options available, so it is important to consult with an accountant or estate planner about what might be the best solution for you.

  1. Make a will
  2. Consider appointing a trustee to manage your assets
  3. Use assets to pay off your debts
  4. Make charitable donations in your will
  5. Transfer property into trust prior to death
  6. Establish an estate plan with a lawyer
  7. Invest in property using Shelter money

The How, When and Where of IHT Planning

One of the most important things you need to know about Inheritance Tax (IHT) is that there are many ways to avoid it. If you have planned and prepared for IHT, you will have little to no chance of having to pay it. Here are some tips on how to avoid IHT:

The first step is to make sure you have a detailed plan for your inheritance. This includes knowing exactly what estate you will be leaving, when it will be made available, and who will receive it. You should also make sure your will is up-to-date and specific about which assets you want to leave to which beneficiaries.

Another important step is to take advantage of any estate planning tools available to you. These tools can include trusts, charitable giving, and limited liability companies (LLCs). By using these tools, you can reduce your taxable estate and reduce the amount of IHT that you will have to pay.

If you are concerned about taxes after you die, don’t stress — there are many ways to reduce or avoid taxes if you need help. Contact an accountant or tax specialist for help with creating a tax planning strategy that fits your individual needs.

What You Need To Get Started With Tax Planning

If you are planning to leave wealth or property to your children or grandchildren, you will likely be affected by inheritance tax. Here is a guide to help you get started with tax planning.

  1. First, make sure you understand what inheritance tax is. It is a tax that applies to the sorts of estates that are passed on from one person to another – typically when someone dies. This includes assets such as property, money, shares and intellectual property.
  2. If the value of the estate is over £325,000 (or €400,000 in the EU) at the time of the person’s death, they will have to pay an inheritance tax bill. The threshold increases for inheritances over £650,000 (or €850,000 in the EU).
  3. The best way to avoid inheritance tax is to make sure your estate isn’t worth more than the limit when you die. You can do this by leaving it all to your spouse, putting it into a trust or arranging a will.

You can also reduce your inheritance tax bill by splitting your estate between spouses or children evenly or giving more away in smaller amounts. 

Examples of Specific IHT Planning Steps

If you are considering inheritances this year, there are specific steps that you can take to avoid inheritance tax (IHT). One of the most important things that you can do is to create a will. This document will outline who will receive your assets and what estate tax they will pay.

Another important step that you can take is to make a separate nomination for IHT. This means that you nominate someone else to be the beneficiary of your estate, rather than leaving everything to your spouse or children automatically. This can help to reduce the amount of IHT that your estate will have to pay.

Finally, it is important to keep adequate records of your assets. This will help you to calculate your IHT liability and make any required payments. By taking these simple steps, you can minimize the amount of IHT that you have to pay this year.


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