Inheritance Tax is payable against the value of our estate when we die.
Inheritance Tax (IHT) is the tax payable by our executors on the assets that comprise our estate. The threshold for IHT changes from time to time.
The current threshold for IHT is £325,000 below which NO tax is payable. Above that threshold, tax is payable at 40%. It is potentially payable against all elements of our estate/Will, and so includes cash legacies, items, and residuary estate.
Gifts to the following are generally FREE of IHT:-
- Civil Partner
Gifts made during the final 7 years of your lifetime may be borne in mind (generally on a sliding scale). And, ‘gifts with reservation of benefit’ (GROBs) may also attract IHT. This where gifts are made but you retain the benefit of them. For example, you purport to gift a painting, but it remains in situ in your home and you continue to look at it and enjoy it each day – you have ‘reserved the benefit’.
Lots more to follow on IHT so watch this space!!