I nheritance Tax is due when a person’s estate (their property and possessions) is worth more than £325,000 when they die. This is called the ‘Inheritance Tax threshold’.
Trinity Holdings has long experience in assisting clients manage their affairs to legally minimise any potential UK Inheritance Tax levied against their estate. Inheritance Tax planning can be complex - it is wise to always seek expert advice.
Below is a brief outline of UK Inheritance Tax from HM Revenue & Customs (HMRC). More details can be found on the (HMRC) website https://www.gov.uk/inheritance-tax/overview
How much Inheritance Tax is paid?
The rate of Inheritance Tax is 40% on anything above the threshold. The rate may be reduced to 36% if more than 10% of the estate is left to charity.
You can see a list of Inheritance Tax thresholds on the HM Revenue & Customs (HMRC) website.
Who pays Inheritance Tax?
Usually the executor or personal representative for the person who has died pays Inheritance Tax using the funds from the estate.
Trustees are responsible for paying Inheritance Tax on trusts, which are a way of looking after assets (money, investments, land or buildings) for people. The trustee is the person who looks after the trust.
If you’ve got an inheritance or a gift from someone who has died you only owe Inheritance Tax if their estate is more than £325,000 and either:
it says in the will that you should pay Inheritance Tax
the deceased’s estate can’t pay it
Working out if Inheritance Tax is due on an estate
If you’re the executor of an estate you need to work out if you need to pay Inheritance Tax.
To see if it’s due, you:
add up the value of everything in the estate (including gifts made in the 7 years before the person died)
take away any debts, like bills and funeral expenses
There’s detailed information to help you if you’re valuing the estate of someone who’s died.
Deadline for paying Inheritance Tax
You usually have to pay Inheritance Tax within 6 months from the end of the month in which the person died - after this, you have to pay interest.
There’s more information on Inheritance Tax deadlines on the HMRC website.
Whether or not you have to pay Inheritance Tax on the estate, you’ll still have to fill out certain forms.
The best place to start with any decision is with information. We suggest you complete our Free Financial Health Check so we can provide individual advice based on your circumstances and goals. If you prefer, contact us directly at info@trinityhi.com or at Tel: +44 7887 744871
Click the link below to download the PDF file. Once completed please save with your name and then email the form to info@trinityhi.com
Disclaimer: This advice is general and based on our current understanding of UK law and Inland Revenue practice in relation to individual residents outside the UK. They are not specific to residents of any particular country. Individual advice is essential in all cases. Levels and bases of, and reliefs from, taxation are subject to change, tax rates and reliefs referred to are those currently applying the UK and their value depends on the individual circumstances of the investor.