I am sure many of you will be searching for inheritance tax ideas to help you plan, plot and avoid having to make your beneficiaries pay 40% tax on the money and assets they get passed down from you.
having paid tax all your life to then know that everything you have saved up could be taxed at 40% (after the first £325,000 or £650,000 if you are married) is an incredible sum.
Here are some ideas that could help you avoid this dastardly tax:
- Use your annual IHT allowances – e.g. £3,000 per annum
- Take out life assurance – to cover the liability
- Give some money or assets away – known as a PET, or potentially exempt transfer
- Use discretionary trusts or discretionary will trusts – to give money away into trust
- Use discounted gift trusts – to give money away but still receive income from it
- Invest in smaller companies – to retain control but avoid IHT after two years
This is a simple list of some of the options available to you. There are many factors to take account of before using any of these to avoid inheritance tax.