|
In order to accumulate wealth during a person’s lifetime either income tax or capital gains tax would almost certainly have been paid and hence it could be argued that inheritance tax is a double tax charge. It was always intended to be a tax on the wealthy but, due to the sharp increase in house prices, the number of people who would not consider themselves to be in that bracket but who are now caught in the trap is increasing all the time.
Over the last five years alone house price inflation has exceeded the increase in allowances by almost four times.
How much will I have to pay?
Inheritance Tax is charged at a rate of 40% of the value of a person’s estate in excess of an allowance set by the Government – the Nil Rate Band. This is currently set at £312,000. The tax charge upon an estate of £550,000 is therefore £95,200.
Can I Do Anything About This?
Fortunately, the answer to this is 'Yes'. A number of basic steps can be taken to at least reduce your exposure, with other means available to mitigate against this further. Click here to find out how it can be avoided or reduced.
|
