Pillars of Support: Inheritance Tax

Hot Tips for Providing the Best Inheritance for Your Loved Ones

12:41 07 March 2013

When you’ve worked hard to achieve some level of success in life, you want to make sure what you’ve gained from that hard work is passed on to loved ones when you’re gone. Leaving an inheritance is great, but knowing how to keep inheritance taxes at a minimum is even greater.

 

History tells us that the great inventor Benjamin Franklin said "but in the world nothing can be said to be certain except death and taxes." I am pretty sure we can all agree with that statement. Perhaps the government saw putting those two sureties together and came up with the inheritance tax.

 

Simply put, the inheritance tax is taxes levied against what you leave behind when you die. This includes all money and property, minus debts and expenses like funeral and burial arrangements. 

 

If you’re planning to leave an inheritance for your family, there are certain tips that can help you keep those taxes to a minimum. Here are some hot tips for providing the best inheritance for your loved ones:

 

• The first £325,000 is not taxable. So once the total value of your estate goes over this amount, taxes will be due against the remaining value.

 

• If you are married, any gift you leave to your spouse is exempt from inheritance taxes. So be sure to leave a nice sized gift for your spouse.

 

• You can set up trusts for your children and grandchildren. These need to be set up as far ahead of time as possible because it has to have been set up at least seven years before your passing.

 

• Leave instructions for your family that explains inheritance taxes, how they work, and the procedure for making sure the right amount gets paid.

 

Inheritance taxes can be a pain, but planning for them now will make passing on your estate a lot easier.