How to Avoid Meeting the Inheritance Tax Threshold

Tax Act

Did you know that whenever anyone dies, the money and the property which is left to the beneficiaries are subject to an inheritance tax? This tax is usually 40% of anything above the threshold, which in the UK at the moment is £325,000.

However, if you are like most people you will not want to see a large chunk of your inheritance go towards taxes. Luckily, there are ways that you can avoid meeting the inheritance tax threshold and not have to pay. Effectively planning your inheritance can save your family hundreds of thousands of pounds.

As house prices have increased over the years but the inheritance tax threshold has not, more people than ever have been liable to pay it. To avoid this, you will need to split up your estate in your will so that you can make sure that each of your loved ones inherits an amount which is under the threshold.

Leaving Money to Your Spouse or Civil Partner

Did you know that if you leave your money to your spouse or civil partner, they will be exempt from paying inheritance tax on any of it? This can be a way for you to pass along your estate without having to worry about meeting the inheritance tax threshold. In the future when your partner dies, the estate will be subject to an inheritance tax threshold again, but the threshold will be higher at $650,000.

Setting up a Trust

Many people place their money in a trust fund in order to avoid paying inheritance tax. Although this was a very popular method in the past, the HMRC has become aware of this practice and has been cracking down on using trusts for this purpose. However, you still might be able to exempt your money from inheritance tax in some cases, such as trusts for someone who is disabled or certain trusts for your children. To make sense of the complicated rules and restrictions, you should talk to someone who specializes in these types of trusts.

Give it Away

One of the simplest ways of protecting your assets from inheritance tax is by giving your estate away in the form of gifts. Any money that you give to your benefactors is exempt from inheritance tax as long as you continue living for more than 7 years after giving the gift. You will also be able to give away £3,000 per year of your assets, and this will be exempted from your inheritance tax threshold. This concession allows parents and grandparents to give money to their children without fear of exceeding the inheritance tax threshold down the line.

These are just a few ways that you can deal with the inheritance tax threshold and make sure that more of your worldly possessions get passed along to your loved ones.

Simon Grant produced this content on behalf of Access Legal solicitors, whose site has pkenty of advice on the subject of making a will.

Interhitance Advance and your Taxes

Tax Act

Nothing feels worse than when a loved relative passes away, especially when you have money problems during that time. Even thought you’re getting a nice chunk of money, there are tax issues that you’ll have to work out and put money away to prepare. The best thing that you can do to ease the burden during this difficult time is to get an inheritance advance. Unlike bank loans, an inheritance advance gives you all the money you need, with no waiting on a bank to approve your request. In order to qualify for a bank loan you have to spend days waiting on people to look over your credit, financial and work history, prior loans, and a hundred other things before they can even think about lending you the money that you need. But an inheritance advance company only needs proof that you are going to receive an inheritance; and they can get you that money quickly and efficiently.

Inheritance Advance and Loans Will Create Tax Issues

The worst part about having to take out a loan is that huge cloud of debt over your head. It seems that banks are just out there to take advantage of us at every turn. You are going through some rough times; why can’t they take it easy on you and give you a loan with some decent terms? An advance on your inheritance makes all of these questions go away. You get the money you need up front; there are no monthly payments, and when the inheritance finally comes through; the money goes to the company who gave you the advance. It’s so simple!

You have options when it comes to getting your inheritance money when you need it. A bank will tell you that a loan is more secure and that the agreement protects you as well as them. Do not go with a bank. You want your money without the complications from a loan. An advance will get you what you need when you need it.