Small business owners who work hard to build up their businesses may feel that the current Inheritance Tax (IHT) regime is unfair. The current threshold of £325,000 will remain in place until 2015 and if you leave behind anything more than this the tax will be charged at 40% on anything extra.
Inheritance Tax is a very lucrative tax for the government. Its purpose is to put money back into society so everybody can benefit, however many people say that tax was paid at the time of purchase on possessions and income tax paid at the time on earnings so it is unfair to pay tax twice. One thing is for certain, more and more people are being hit by it especially with the rise of house prices. It is therefore essential to prepare and take steps to avoid a big tax bill.
In this article for bytestart.co.uk, Inheritance tax – how to minimise your liability, Carol Cheesman looks at things you can do to escape this oft-resented tax and understand more about where you might be caught out if you’re not careful!
It covers the basics and then looks at some options worth considering; amongst these are Gifting and Life Insurance.
IHT rules can become complex, and this article provides a very high-level summary of the main rules. We recommend you consult an accountant if you have any questions.
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