UK Inheritance Tax(IHT)

Inheritance tax (IHT) is a tax on the transfer of assets, such as property or money, from a person's estate when they die to their heir or beneficiary.

An estate basically includes anything that is owned by a person including items owned jointly.

Currently (since the 2005 Budget) the UK inheritance tax (IHT) boundary is £275,000, with the inheritance tax rate being 40%. That 40% inheritance tax rate is applied to the amount that exceeds the threshold of £275,000. However in the majority of cases (around 96%) inheritance tax does not apply.

Before the inheritance tax is calculated there are a number of deductions that can be subtracted, these include things like utility bills and funeral costs.

There are a number of circumstances where inheritance tax will not apply regardless of the amount. The main one being if you leave everything to your spouse, provided that you are both UK residents.

The inheritance tax due date is worked out as six months from the end of the month that the death occurred. If the inheritance tax has not been paid by that date, interest will be charged on the amount.

Inheritance Tax Planning
Just as you would plan for your retirement by saving for a pension scheme, inheritance tax planning can help your heirs avoid paying inheritance tax. Inheritance tax planning is a good way to ensure that your heirs or beneficiaries benefit as much as possible from any inheritance they receive.

In order to ensure you leave your heirs the best possible inheritance, we would recommend that you seek independent financial advice regarding inheritance tax planning.

Click here to go to HM Revenue and Customs website for UK inheritance tax rates and thresholds and to help with your inheritance tax planning

You can also use the links below for more inheritance tax information and for independent inheritance tax planning advice.

	Inheritance Tax Guide Guide to inheritance tax issues. Find out how much you should pay.
	Find Inheritance Tax at Ask.com Whatever you're looking for, find it with Ask.com.