With reports pouring in that around 2 million properties in Britain might be worthy of landing their owners with a hefty tax bill, there is a genuine need for expert consultants, who can help such individuals and provide them with ideas on the different ways to avoid inheritance tax. Inheritance tax is said to be currently charged at 40 percent and this tax year, it is reported to kick in every £1 of properties that are over £300,000. This effectively means that the tax that is due on an estate worth £400,000 is £40,000, which is 40% of £100,000.
This is indeed a significant amount, however, according to the experts, this is often regarded to be a voluntary tax, since there are various ways that the individual can legally organize his finances to reduce or avoid such taxes. This would require the individual to visit the experts and listen to their suggestions in this regard, as several options like remortgaging and equity release could sound complex. Planning early, is sure to help the individuals to deal with inheritance tax in a better way.
There are three effective ways to avoid inheritance tax, in a legal manner and to pass the wealth to the family, without actually attracting the 40% inheritance tax. The first type is by not having any wealth or assets to the individual's name, which would not attract any tax from the government. This can be achieved by purchasing the assets into different structures and trusts and to transfer them into structures later. This needs to be undertaken, while the individual is in good health and before retirement or later. However, proper tax planning needs to be done.
The next way of avoiding inheritance tax is by investing the wealth in the free assets of the inheritance tax. The qualifying assets are FTSE 250 share-portfolios, Farms and Woodland. Each has different conditions that are attached to them, including varying risk profiles. But, this particular process might suit some, and not everyone.
The final type of avoiding inheritance tax is by making the assets sum value equivalent to zero. This can be achieved through the creation of a legal charge over the estate or simply with the creation of a debt against the asset that is equal to the value of the real estate. This particular methodology is sure to work for the individual at any point of time and is perfect for ‘death bed' planning tax, especially when health has started to crumble.
This is indeed a significant amount, however, according to the experts, this is often regarded to be a voluntary tax, since there are various ways that the individual can legally organize his finances to reduce or avoid such taxes. This would require the individual to visit the experts and listen to their suggestions in this regard, as several options like remortgaging and equity release could sound complex. Planning early, is sure to help the individuals to deal with inheritance tax in a better way.
There are three effective ways to avoid inheritance tax, in a legal manner and to pass the wealth to the family, without actually attracting the 40% inheritance tax. The first type is by not having any wealth or assets to the individual's name, which would not attract any tax from the government. This can be achieved by purchasing the assets into different structures and trusts and to transfer them into structures later. This needs to be undertaken, while the individual is in good health and before retirement or later. However, proper tax planning needs to be done.
The next way of avoiding inheritance tax is by investing the wealth in the free assets of the inheritance tax. The qualifying assets are FTSE 250 share-portfolios, Farms and Woodland. Each has different conditions that are attached to them, including varying risk profiles. But, this particular process might suit some, and not everyone.
The final type of avoiding inheritance tax is by making the assets sum value equivalent to zero. This can be achieved through the creation of a legal charge over the estate or simply with the creation of a debt against the asset that is equal to the value of the real estate. This particular methodology is sure to work for the individual at any point of time and is perfect for ‘death bed' planning tax, especially when health has started to crumble.