How can I reduce inheritance tax in London?
Have you reached the age where you are beginning to think about what you will leave behind for your children or next of kin?
Then you should also start thinking about how you best protect what you leave behind from being completely withered away by inheritance tax. If you have asked yourself the question; “How can I Reduce my inheritance tax?”, then you have come to the right article.
What happens with your assets and estate when you pass away?
If you are a UK domicile your estate will be subjected to inheritance tax before your next of kin will receive anything. How much inheritance tax is charged depends on value of your estate. If your estate is valued over £325,000, 36-40% of the estates value will be charged before the remainder is handed to your next of kin. That means that if you leave your home to, e.g., a spouse or your children, and the property is worth less than £325,000, then they will inherit the property without having to pay 40% inheritance tax. But if the property is worth, e.g., £400,000, then they have to pay a tax bill of £30,000 when taking over the property.
What that means to your next of kin, is that they need to have sufficient funds to be able to take over the property, or be forced to sell. Alternatively, they might be eligible for a loan to be able keep the property. But an expensive property is likely to send the heir into debt if they do not choose to sell. And the same is true for other valuable, non-liquid assets.
So what can you do to protect the inheritance of your next of kin?
First of all you can make sure that the estate contains sufficient funds in liquid or easily transferable assets to pay the inheritance tax. Having taken the time and made the investment in proper inheritance tax planning in the UK, is essential as soon as the total value of your estate goes above £325,000. But making sure that your next of kin is able to pay the tax bill when taking over your estate does not change how much they will have to pay. So you might want to take further measures, unless you feel exceptionally generous on your next kins behalf.
An effective way to reduce inheritance tax in Yorkshire or any other UK region, is by having a professional tax planner set up a trust to secure valuable assets, not just from inheritance tax, but also capital gains tax while you’re alive. Searching for inheritance tax planners in London is no difference from planning and trying to reduce inheritance tax in Manchester. The legal regulations are the same, but the difference between good inheritance planning and no planning is not!
For more information about improving your tax strategy, contact one of the leading inheritance tax planners in Yorkshire, Issac Qureshi via the form below.