If you, a relative, or a friend, are concerned about having to collect inheritance tax, you may want to learn more and see if there is a way to reduce the inheritance tax you have to pay. Basically, inheritance tax is a tax on inherited property, money and shares paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate of a person who has died.
Here are some ways to pay less inheritance tax.
1. A will must be written to notify family and other relatives of intentions after death. Without a will, the property does not have to be used.
2. It is important to decide who is the heir and who will receive a share of the inheritance. When the will already exist and it is not clear who gets what, or there is a surprise, the will can be challenged.
3. It may be beneficial to sell the property you are transferring to an overseas trust or insurance fund to avoid paying UK taxes.
4. Another suggestion is to invest money in the hope that the return on investment will cover the inheritance tax bill.
5. Perhaps the best option is to give the property now to a loved one while everyone else can enjoy it.
6. If there are children or grandchildren, now the money can be invested in a trust fund for the children or grandchildren.
7. It is possible to own a large or valuable house that must be sold in the event of death. Why not consider reducing the size of the house which is much smaller and perhaps more suitable? The money saved can now be passed on to loved ones. Maybe you want to take out a mortgage or are considering freeing up capital so that property costs are lower?
8. Marriage or civil partnerships can be beneficial because the couple does not pay inheritance taxes. If you're thinking about making a commitment, why not now?
9. You can become a general tenant if you don't want to get married. This means that you and your spouse will own 50-50 shares in the property and thus the share value of the house will be much less and therefore less inheritance tax will be paid.