Following the revelation that David Cameron received a £200,000 gift from his mother, Inheritance Tax is once again in the political spotlight.
Inheritance Tax (IHT) is paid if a person’s estate (including possessions, money and property) is worth more than £325,000 when they die. This is known as the ‘Inheritance Tax threshold’.
In reality, IHT is not something that many will encounter in their life. In fact, recent statistics from the OBR (Office for Budget Responsibility) have revealed that only 40,100 families (approximately 8% of estates) will pay IHT in 2016/17.
This tax can be minimised (or erased entirely) by certain gifts in the seven years before death, and assets passed to a spouse (or charity) are exempt from Inheritance Tax. The issue of course lies with the general inability to predict one’s passing.
Have any questions on inheritance tax planning? Please contact the team here at Talis.