What is inheritance tax?
Inheritance tax is only incurred on anyone who owns an estate which they have inherited and which is worth more than the £325,000 threshold (for the financial year 2010-2011). However, married couples and people registered with civil partnerships can raise this threshold to as high as £650,000. Typically, an inheritance tax must be paid within 6 months of the death of the deceased. If it is not paid within this time then interest is charged. However, the tax on a property is usually paid in annual instalments and for inheritance taxes on trusts there is a different system altogether.
There are numerous exemptions, however. Anything that has been left to a spouse or a civil partner who has a permanent British residence is usually exempt from inheritance tax. Also, if you make a gift to someone and you survive for more than 7 years, you are also exempt, regardless of the value. All gifts to charities are also exempt, as are gifts to individuals that do not exceed £250. Any gifts that are given to somebody who is married or entering a civil partnership are also exempt from inheritance tax to a certain degree. Also, if the deceased owned a National Heritage property, for example, there would be some form of tax relief as well.
You will be required to complete a special inheritance tax form, regardless of whether you have to pay it or not. Typically the tax is paid from a bank account or through annual instalments, depending on individual circumstances. You need to value the estate, including the value of the property, assets, possessions and any investments, before you can determine whether any inheritance tax is due.For some people who encompass a lot of money through inheritance splash out on gifts for themselves such as cosmetic treatments such as botox sussex, cars, or even new houses’.
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