The inheritance tax allowance is worth £325,000; how can you cut your IHT bill?
Although most people won’t have to pay inheritance tax, many resent the idea of it. So how can you reduce your inheritance tax bill?
Most people don’t leave enough money behind when they die to pay inheritance tax, but it’s a tax that still causes a lot of resentment and anxiety. The amount an individual is able to leave before they have to pay inheritance tax is £325,000. While married couples and anyone in a civil partnership can effectively double the threshold to £650,000, it’s couples who live together but who aren't married who get caught out.
Inheritance tax has always been one of the most unpopular taxes, but you can take steps reduce your bill.
From time to time politicians of various shades promise to abolish inheritance tax or at least to reduce its impact. Even though property and share prices took a hammering in the aftermath of the credit crunch, many people worry about the impact that inheritance tax might have. Figures from HM Revenue & Customs generally show that it isn't the wealthiest people who pay inheritance tax, as they've put plans in place to minimise it.
Many adults die without making a will, but if you don’t have one, you have no control over what happens after you die.
A will is just a document that says what you’d like to happen to your possessions, money and children after you die. It can be short and simple or lengthy and detailed and include information things such as the type of funeral you’d like. You don’t need to use a solicitor for it to be legal – you can write it on a scrap of paper – although most people do use professional help.
