We wanted to remind you of the inheritance tax (IHT) implications of making cash gifts during the 2023-24 tax year ending on April 5, 2024.

We wanted to remind you of the inheritance tax (IHT) implications of making cash gifts during the 2023-24 tax year ending on April 5, 2024.

You can’t take your wealth with you when you die (the wealthier of the ancient Egyptians tried).  Someone must inherit and if you don’t leave a Will, the decision is made for you by the Intestacy Rules, found in Section 46 of the Administration of Justice Act 1925. Our latest article explains the benefits of making a bespoke Will. 

Inheritance tax (IHT) is commonly collected on a person’s estate when they die but can also be payable during a person’s lifetime on certain trusts and gifts. The rate of IHT currently payable is 40% on death and 20% on lifetime gifts. IHT is payable at a reduced rate on certain assets if a taxpayer leaves 10% or more of the 'net value' to charity of their estate.

There are special intestacy rules that govern how assets are divided if you die without making a will. If this happens your assets are passed on to family members in accordance with a set legal formula. This can result in a distribution of assets that would not be in keeping with your final wishes and can be especially problematic for cohabitees (a couple who live together but are not married and have not entered into a civil partnership).

Tax planning might not sound like the most exciting way to spend your time, however it could have a significant effect on your finances. As the 2020/21 tax year draws to a close there are multiple considerations for what you can do to utilise your cash before the limitations reset as well as planning ahead for the future.

Dubbed ‘the most hated tax in the UK’, inheritance tax (IHT) is a tax paid by a person who inherits money, property or any form of possessions from a person who is deceased. The government earned more than £5bn in 2018 from IHT. 

However, in most cases you will not need to open your cheque book as there are a number of exemptions that may cover your intended gifts. 

With the new tax year now upon us, any allowances that you used up in full during 2018/19 have been reset and you can now begin using them again.  
 

On the face of it, this sounds implausible. How can you change your will if you have died?

In reality, as long as any beneficiaries left worse off after any change, agree, you can change a person’s will after their death.

The Office of Tax Simplification (OTS) has already highlighted inheritance tax (IHT) as an area ripe for an overhaul and now the Chancellor, Philip Hammond, has asked the body to conduct a system-wide review of the current tax regime, and wants to see proposals for simplification, ‘to ensure that the system is fit for purpose and makes the experience of those who interact with it as smooth as possible’.

The Office of Tax Simplification (OTS) has already highlighted inheritance tax (IHT) as an area ripe for an overhaul and now the Chancellor, Philip Hammond, has asked the body to conduct a system-wide review of the current tax regime, and wants to see proposals for simplification, ‘to ensure that the system is fit for purpose and makes the experience of those who interact with it as smooth as possible’.

Planning to minimise Inheritance Tax (IHT) is something that many of us put off until it is too late. IHT is charged on a person’s estate when they die and on certain gifts made during their lifetime. The rate of tax on death is 40%.

　

Planning to minimise Inheritance Tax (IHT) is something that many of us put off until it is too late. IHT is charged on a person’s estate when they die and on certain gifts made during their lifetime. The rate of tax on death is 40%.

　

New inheritance tax rules for passing on the family home start on 6 April 2017 and many people have a New Year’s Resolution to either make a Will or update their Wills.

New inheritance tax rules for passing on the family home start on 6 April 2017 and many people have a New Year’s Resolution to either make a Will or update their Wills.

If you leave your entire estate to charities, will you be turning in your grave if disinherited relatives mount a challenge to break your last will and testament, and succeed?

 

If you leave your entire estate to charities, will you be turning in your grave if disinherited relatives mount a challenge to break your last will and testament, and succeed?