Inheritance Tax: Hold Your Breath!
The payment on death of Inheritance Tax has undergone
significant changes in the last couple of years.
Visit: http://www.cluttoncox.co.uk
Interestingly, Inheritance Tax becomes one of the main
focuses of attention in Party Conference season.
The Conservatives stole a march on the Government last
year, when they announced that would allow the unused tax
exemption on the death of the first spouse to be available
on the death of the second spouse.
Previously, the only way to mitigate the full payment on
Inheritance Tax on the death of the surviving spouse was to
employ expensive and complicated trusts utilising the then
so called “Nil Rate Band Discretionary Trust”.
Well, lo and behold, the Labour Government thought that
they might be seen as an unnecessarily punitive taxing
government, especially when more of Gordon Brown’s “hard
working “families were caught in the Inheritance Tax trap,
and copied the Conservative’s plan.
Now, the present rules are that, Inheritance Tax is levied
on a person’s estate and is payable on all assets over and
above the Inheritance Tax threshold (currently £325,000) at
40%. However, for married couples or civil partnerships, if
the first person dies without using their £325000
allowance, the surviving partner may use both allowances on
their death, and Inheritance Tax will only be paid on
assets over and above £650,000.
It can be a lot worse, however,if you die without making a
Will (what is commonly reffered to as “dying intestate’),
as there are certain rules that dictate how your assets
will be allocated. This may not be the way that you would
wish your money and possessions to be divided out.
Unmarried partners and partners who have not registered a
civil partnership do not automatically inherit from each
other unless there is a Will.
In these circumstances, the death of one partner may create
serious financial problems for the surviving partner.
The Conservatives, had prior to Conservative Party
Conference yesterday, heralded a further change to
Inheritance Tax, once they were in power, by taking out
everyone other than literally millionaires.
The threshold would be increased to a £1,000,000.
Yesterday’s announcement by the Shadow Chancellor, George
Osborne, appeared to suggest that the alteration in the
exemption in Inheritance Tax would not be a priority.
Political speak with the effect that these changes may not
be introduced in the next Parliament.
As, the title to this post alludes, if you wish to save on
Inheritance Tax: Hold your Breath!
—————————————————-
Don’t forget to learn about mutual funds in retirement plans for 401k advice, asset allocation, investment advice and a investment strategy. Protect your retirement account.
Related Posts
