Act immediately to earn “more bites of the cherry” and lower your IHT bill.
Many Britons are concerned about inheritance tax (IHT), and an expert on the charge has offered advice on how to make the most of one’s wealth.
Inheritance tax is a levy levied by HM Revenue and Customs (HMRC) on the value of a person’s estate over a certain threshold – normally £325,000 – after they die. It is currently charged at a fixed rate of 40%, with many people falling within the tax net. Because many people despise the idea of their family and friends paying taxes after they die, some people will wish to plan ahead of time.
Many people hope to prepare their estate while they are still alive in order to decrease or eliminate their IHT tax afterwards.
With this in mind, This website spoke exclusively with Lee Platt, Director at Barclays Wealth and Investment, who provided additional information and encouraged Britons to look into the nil-rate band, which is the amount up to which an estate is exempt from paying IHT.
“Every individual in the UK gets a nil-rate band allowance against Inheritance Tax,” he explained.
“Currently, it is set at £325,000 per person, but if you are married, your nil-rate bands are combined for a total of £650,000.
“On the value of your estate up to that amount, you will essentially not pay any Inheritance Tax.
“Anything over that amount would be subject to a 40 percent flat rate of Inheritance Tax.
“Most people think they only get to use that allowance once when they die, but many people don’t realize they can use it several times throughout their lives.
“For example, a person could make a donation of up to the nil-rate band outright or into a trust, and if they live seven years, it will become totally exempt according to IHT laws.
“Then the allotment that this person has spent will be restored to them and handed to them to use again or when they die.”
However, Mr. Platt went on to say that many people aren’t taking use of the possibilities available to them when it comes to estate management.
As a result, people may be missing out on opportunities to save a lot of money.
“A lot of people,” he added. “Brinkwire Summary News.”