Reducing Inheritance Tax on Parental Residential Properties
For many families, the bulk of their family wealth will be tied up in their residential property. From an Inheritance Tax perspective, this means that any amounts in excess of the Inheritance Tax threshold of £325,000 per person (£650,000 per couple) will be liable to Inheritance Tax at a rate of 40%. This, in turn, means that for each £100,000 of the estate over these thresholds, the children would only be able to benefit by £60,000. Therefore it can be seen that finding ways to reduce Inheritance Tax on parental residential properties can help the children significantly.
Taxation Treatment for Gifted Properties
If you are considering gifting a property it is important to understand exactly what the taxation implications of this decision would be. The relevant taxes to consider would be Stamp Duty, Capital Gains Tax, Inheritance Tax and Income Tax.
Understanding Tax Avoidance
There is no question that some transactions which result in the lowering of a person’s tax bill are perfectly legitimate whilst others are not. However separating out those transactions which should be banned is not always straightforward.
Estate Planning Awareness in Later Life Benefits You and Your Family
It is reasonable to suppose that most people would like their financial affairs to run smoothly when they become too old to manage such matters efficiently or easily themselves. It is also reasonable to suppose that most people want to pass as much of their wealth to their family as they can rather than to the tax man when they pass away. Both of these objectives can be achieved through timely estate and financial planning as you enter your later life years. The benefit such planning will bring you and your family is considerable.
Why ongoing advice on trusts is essential?
Inheritance Tax planning today can be a little complicated and so advice on trusts is essential. The increased flexibility within schemes, the integration with pensions advice, the role of trustees and the need for regular investment reviews, are all important.
Lasting Power of Attorney
The UK population is expected to rise to almost 75 million by 2039, with more than one in 12 people aged over 80. A 55-year-old male today can expect to live for another 31 years on average and a woman age 55 today can expect to get close to her 90th birthday.
Deeds of variation remain unchanged
Following the revelation that Ed Miliband had been “accused” of using perfectly legal means of avoiding IHT by using a deed of variation – that moved ownership of some of the family home into his and his brother’s names – the government decided to review these arrangements.