4 effective ways to pay less inheritance tax by tax planner, Issac Qureshi
There are no ways around paying inheritance tax in the UK. If you leave an estate worth more than £325,000 your estate is subjected to British inheritance tax of 36-40% of the estate’s value above the threshold.
BUT, there are ways reduce the amount your heirs have to pay when inheriting your estate. Ways that are 100% legal and doesn’t include any form of tax evasion. In this article we will go over four effective ways to reduce inheritance tax in collaboration with inheritance tax planner, Issac Qureshi.
- Plan what should happen to your estate in good time
As with your income tax, the best way to reduce your inheritance tax is to plan ahead. None of us know exactly when our time will come, so it’s always best to be prepared. There is also the risk of developing dementia or other debilitations as you get older that makes you unable to write a legally binding will. So having worked out a will early in life makes it much easier to make amendments later, Should you change your mind or your estate change. Writing a will is the best way to control the distribution of your estate once you pass away.
- Spend your savings while you can
According to inheritance tax Specialist in Yorkshire, Issac Qureshi, you will over pay on your inheritance tax bill if you don’t consider spending your savings while alive. The most common ways to spend your wealth is donations to charity, funding a memorial fund, or simply enjoy a comfortable retirement.
- Take advantage of your annual inheritance tax exemption
You can also spend your wealth with or on your heirs. E.g., you can give presents worth up to £3,000 each tax year to each of your heirs, effectively giving them annual advances on their inheritance tax-free. Your annual tax exemption allows you to gift £3,000 pounds/year that won’t be counted as part of your estate when you pass away. Note that if you give away gifts exceeding a value of £325,000 within the 7 last years of your life, the recipients can be charged inheritance tax at a reduced rate.
- Use a trust to cut your inheritance tax
Top inheritance tax planners in Yorkshire advice their clients to consider a trust to reduce the inheritance tax on their estate. A trust not only has long list of tax benefits, such as reducing inheritance, income, and capital gains tax, it is also the best way to make sure your estate goes to the intended heirs, should they
below 18 years of age.
For more information about improving your inheritance tax strategy, contact Issac Qureshi via the form below.