It is likely one of the few rigid constants; everyone at some point will shuffle off this mortal coil and yet for somewhat obvious reasons most of us would like to not spend too much time fascinated by it, let alone planning for it.
Sadly a lack of tax planning can price dearly, and as one of the taxes we're subject to in the UK is 'Inheritance Tax' it's important that as a way to save our loved ones pointless expense we take just a little bit time to think about the time after we have gone.
Inheritance Tax is charged in the event you die with an 'estate' valued at anything over the threshold set by the Chancellor (for 2010-11 this was £325,000). Your 'estate' includes all money in your bank accounts, investments, property and companies, so Inheritance Tax will affect far more of us than most people assume.
When your estate is valued over the threshold set, Inheritance Tax is payable at forty per cent on the amount over the threshold.
Unfortunately simply giving all the pieces away while you might be nonetheless alive will not be going to save your beneficiaries from this tax, unless you manage to do it seven or more years before you die, (so get that crystal ball ready), because presents and trusts made throughout your lifetime are also subject. HMRC's guidelines do permit some methods so that you can decrease your heirs' tax bills by gifting, so discuss to your accountant to find out more.
In certain situations Inheritance Tax doesn't have to be paid even when your estate's worth is over the threshold; The Tax Man smiles as an example on nuptials, so leaving your estate planning [1] to your spouse or civil partner will often exempt it from Inheritance Tax, as will giving it as a real, not-for-revenue, marriage ceremony gift.
If you are feeling charitable there shall be no Inheritance Tax to pay for a UK registered charity in case you bequeath your estate to them, and if you are fortunate enough to be leaving a National Heritage Property or woodland to someone as part of your estate they'll typically find tax reduction available to them.
Making a will will help your wishes on your estate be executed after you die however it's only wise tax planning that may help limit the tax bills of your beneficiaries, and so it should be price a visit to your accountant in order to save your loved ones from having to provide the federal government a bit of their inheritance. Nothing in life is as certain as dying and taxes and typically they even walk hand in hand.