Introduction Of Inheritance Tax ( Iht )

1547 Words Apr 7th, 2016 7 Pages
Introduction to Inheritance Tax (IHT)
Inheritance tax or IHT is becoming more of a concern to many people.
Most properties or assets you leave after you pass away are not being charged with inheritance tax because their cumulative value isn’t high enough. However more properties are being dragged into the net of IHT due to the increasing real estate prices but with careful planning there’s a lot that can be done to soften the effects of Inheritance Tax.
Who is liable to pay inheritance Tax?
Individuals with permanent address in the UK are caught by IHT on assets they own anywhere around the world. Individuals with permanent address outside the UK only pay UK inheritance tax on assets that are physically located in the UK, but they may be liable to pay foreign inheritance tax on non-UK assets in their home countries.
Exempt transfers
Many gifts are exempt from Inheritance Tax. The most common ones include...
 Small gifts to any individual during a fiscal year, which doesn’t not exceed £250;
 Gifts in relation to a marriage; £5,000 if made by a parent of one of the newlyweds; £2,500 if made by a grandparent and £1000 if made by anyone else;
 Gifts that are a part of your regular expenditure out of income and which does not decrease your net income below the amount needed to maintain your normal living standard;
 Annual transfers below £3,000. Any unused amount may be carried forward for 1 year only;
 Gifts to charities & registered amateur sports clubs;
 Gifts to…

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