Losing a loved one is painful enough. But if they put you in their will, you may have to deal with inheritance taxes. Here is a summary of the inheritance tax rules in the UK. And since paying too much tax is a pain (especially when it comes to inheritance taxes), we'll include some tips on how to reduce it or even avoid it altogether. If you want expert advice on inheritance tax, contact us.
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What is inheritance tax?
Inheritance tax is a tax on the property of a dead person. In other words, HMRC has an interest in the property, money, and other belongings of the dead person.
A terrible tax is due when someone dies. You may also have to pay for items, money, or other items the deceased gave them while they were still alive (more on that later).
You don't have to bear inheritance tax if:
The deceased's net worth is less than £325,000 (or £650,000 for a married couple).
You are the spouse or civil partner of the deceased and they leave everything to you.
The deceased left everything to someone exempt from inheritance tax, e.g. B. charities, political parties, or government agencies such as museums.
If the deceased donated money or property to you while they were still alive, they can be exempt from inheritance tax as long as they comply with HMRC rules (we'll get to that later).
The inheritance tax exemption limit can be transferred between spouses. So, for example, if your wealth is worth £200,000, your spouse or domestic partner could add an unused £125,000 to their threshold, bringing it to £450,000.