Tony Granger outlines some strategies to reduce inheritance tax bills now and in the future – quite legally.
Inheritance tax (IHT) is seen by many as iniquitous, as it is a death tax payable on assets that have mostly been purchased from after-tax income. No matter what your income tax status is or was, IHT is normally 40% on taxable death estates. IHT is a tax on assets after exemptions and allowances. You may have been a basic rate taxpayer all your life, only to become a 40% one on death.
In 2017, the government recovered £5.2 billion in IHT. It makes up 1% of government income, and 4% of deceased estates pay it. Taxes on deceased estates are not new – it all started with Probate Duty in 1694, over 300 years ago.
Strategies to reduce IHT
There are many ways to avoid paying IHT needlessly – but most require planning, and you may need financial advice.
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