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Inheritance Tax |
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My wife and I are considering options which will allow us to alleviate the burden of inheritance tax. We jointly own property and assets worth around £500,000. Should anything happen to either one of us, presumably one of us would be in receipt of £250,000 worth of property and assets, leaving £8,000 subject to inheritance tax. Is this a correct assumption or are there other things to take into account?
Secondly, can I give £4,000 to each of my sons as a gift to alleviate paying any tax at all? I understand this is still subject to inheritance tax for seven years but that the rate of tax paid goes down percentage wise on a yearly basis?
No Inheritance tax will be payable on the first death due to the spouse exemption provisions. However on the second death, assuming the property and assets remain the same in value, there is a great IT burden. In depth tax planning advice should be sought.
You are able to gift a total of £3,000 per annum without incurring any liability to income tax. Any amount over and above this can be subject to IT if you do not survive the gift by seven years.
Answered by:Mark Keenan, Editor
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My estate is worth around £200,000 so it would not be subject to inheritance tax. If I wanted to give each of my children gifts of £10,000 each would this be subject to any sort of tax?
No Inheritance tax will be payable by your children providing your estate continues to remain beneath the tax threshold in place at the time of death.
Answered by:Mark Keenan, Editor
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