Inheritance Tax Planning

The HMRC has different tax rates based on your country of domicile, which doesn’t have to be similar to the country used for your income tax

Spouses and civil partners can receive a maximum £325,000 before IHT while unmarried partners do not have the same rights under IHT laws. Where the estate is left to a non-exempt recipient, the £325,000 nil rate threshold also applies.

Where your assets are located both in the United Kingdom and globally. Assets located abroad will be liable to UK inheritance tax

What your estate comprises of i.e. land, houses, cash, bonds, artworks, antiques etc.

There are lots of people today who have no Will, while some who do are yet to make updates that reflect the current changes. Tax rules and rates are always changing, and it is imperative to be on the lookout and ensure there is no conflict on your Will. By not having a Will, your estate might end up with the wrong person or perhaps trigger an increase in the IHT bill. By directing your wealth or property to a spouse or probably, civil partner, it is possible to secure an absolute IHT exemption. Although this might not work out if the said spouse is not a domiciliary of your country.

When you make a lifetime gift to individuals, the government automatically exempts it from IHT. In other words, If the person can survive 7 years from when you make this gift, your children or family won’t have to pay Inheritance Tax (IHT) for that gift.

If this is appropriately structured, assets placed on trust will not be subject to IHT. Furthermore, it can provide control over the generation’s use of wealth. However, some IHT charges often apply to a particular trust. If you’re planning to retire in another country, consider if this medium is the best way to hold wealth there, as some countries don’t recognize trust planning.

One logical way to reduce inheritance tax is probably leaving for a country where such doesn’t exist. However, IHT exposure might continue for some specific period.