Inheritance tax is one of the fastest-growing taxes for the UK Government. With rising property prices and allowances remaining relatively static until very recently, it is no longer a tax for the very wealthy. Those of relatively modest means can incur a significant charge against their Estate before it is distributed to their heirs.
UK Inheritance tax is charged on all UK based assets regardless of your nationality and on your worldwide assets if you are ‘domiciled’ in UK. Domicile has little to do with where you are living at the time of your death and is a term used by Her Majesty’s Revenue and Customs (HMRC).
Although not exclusively associated with transfer of value on death, this is when most people first encounter this charge, the rate of tax applied on death is 40% after allowances and exemptions.
Gifting strategies using allowances, exemptions and legal structures can reduce this liability and result in more of your assets being passed on to your heirs and less to the taxman. Speak to us about how this tax may affect you and what measures can be taken to minimise its effect on your Estate.