Can you legitimately avoid inheritance tax?

[barleycorn]

Who will have to pay inheritance tax on it if you die and it's over the value of £325k.

There is no IHT to pay if a spouse inherits. Furthermore, if your spouse leaves everything to you then you can transfer their tax free allowance of £325K onto yourself thereby increasing it to £650K. If they have used any of their tax free allowance then the amount that can be transferred is decreased accordingly.

 

http://www.which.co.uk/money/tax/inheritance-tax/guides/inheritance-tax-for-married-couples-and-civil-partners

 

And, if its just your home that you are giving to your children then the allowance is £425K.

 

https://www.gov.uk/inheritance-tax

[max]

You do realise that you'll be dead and won't pay any taxes on anything anymore? If it's an issue for your children then make them do the research.

[Robin-H]

Who will have to pay inheritance tax on it if you die and it's over the value of £325k.

 

No they won't. There is no inheritance tax between spouses - even if you die without a will.

[tinfoilhat]

No they won't. There is no inheritance tax between spouses - even if you die without a will.

 

But unless youve got a much younger/healthier spouse isnt it delaying the inevitable?

[Robin-H]

But unless youve got a much younger/healthier spouse isnt it delaying the inevitable?

 

Not really. The spouse would also have a nil band rate of £325,000. There is also a £100k family home allowance. Transferring everything to your spouse means that the nil band rate isn't used up, and so the surviving spouse is then able to give their children (or whoever) £650k before inheritance tax kicks in, even more if you are inheriting the family home (£850k)

[El Cid]

You do realise that you'll be dead and won't pay any taxes on anything anymore? If it's an issue for your children then make them do the research.

 

I believe that you have to make the tax plans 7 years prior, they can take money from the value of your house for care costs; 50% of people that live beyond 80 will get dementia.

So its quite possible.

Last year Lord ???? put his funds in a trust 50 years prior to his death, in order to avoid taxes.

[Thurns_BC]

You’re probably best off speaking to a specialist for a few hundred quid -could save you a fortune in the long run and SF probably isn’t the best place for sound IHT advice

[Daven]

There is a threshold for inheritance tax, it's not 40% of everything.

Also the state is wise of old people disposing of assets just before they pop their clogs.

 

If you want to transfer everything to our children it's generally better to do it many years before your death.

 

I believe it is seven years.

[Robin-H]

I believe it is seven years.

 

Yes, it's seven years, with tapered relief up to the seven year cut off.

 

That is only for inheritance tax however - other taxes such as capital gains may still apply (for example when gifting your children shares or property etc).

[monkey104]

Easy, sell them your house and spend the proceeds.