HM Revenue & Customs (HMRC) has announced changes to the inheritance tax (IHT) process to ensure minimal disruption because of the coronavirus pandemic.Continue reading
A recent study found that just 45 per cent of people who are gifting assets or large sums of money understand inheritance tax (IHT) rules.Continue reading
A case in which a dispute arose between two step-sisters concerning the inheritance of their parents estate, who were found dead at exactly the same time, has been settled by a judge.
The response to a Freedom of Information (FoI) request has revealed that as many as one in four estates that are liable for IHT are investigated each year.
In 2018-19, more than 5,500 investigations were launched by HMRC into the approximately 22,000 estates that had to pay the tax.
Despite the introduction of the Residence Nil Rate Band (RNRB) effectively increasing the IHT threshold when a main residence is left to a direct descendent, the number of investigations has increased by 7.8 per cent since 2017.
The figures came within weeks of the Office of Tax Simplification (OTS) unveiling proposals to simplify IHT, which is widely regarded as overly complicated and difficult to understand.
In the 2018 to 2019 tax year, HMRC opened 5,537 inheritance tax (IHT) investigations, which equated to almost a quarter (23 per cent) of the 22,000 estates on which the tax is applicable.Continue reading
At present, when someone dies within seven years of passing on money, property or possessions to loved ones, tax of up to 40 per cent must be paid.Continue reading
According to new research conducted by the National Centre for Social Research (NatCen) and the Institute for Fiscal Studies (IFS), only one in four people who make financial gifts are aware of the inheritance tax (IHT) risks.Continue reading
As of 6 April, direct descendants can inherit up to £950,000 completely free of inheritance tax from their parents or grandparents thanks to increases in the residence nil-rate band.
This tax-free allowance on inherited property has risen from £125,000 to £150,000 this year and will rise again next year to £175,000.
In order to qualify for this allowance, an individual must pass on their main home to a direct descendant, such as a child or grandchild.
The residence nil-rate band is layered on top of the existing basic allowance for Inheritance Tax (IHT) of £325,000 per person or £650,000 for a married couple or civil partners.
This means that spouses and civil partners could leave behind up to £950,000 in 2019-20, rising to £1 million from next year.
Where an estate is valued at more than £2 million, the residence nil-rate band will be progressively reduced by £1 for every £2 that the value of the estate exceeds the threshold.
Individuals in England and Wales will normally incur IHT at a rate of 40 per cent on all estates valued over this threshold, so it is worth planning ahead to make sure you minimise any liabilities.
According to data released by HM Revenue & Customs (HMRC) inheritance tax (IHT) payments have hit a record high.Continue reading
Exploring your trusts and other estate planning options enables you to detail your wishes regarding how you would like your estate to be managed so that your legacy can be passed onto the next generation in a tax-efficient way. Detailed below are a few things you should consider to ensure you are utilising your assets in the most efficient way.Continue reading