Cut Your Inheritance Tax

Top 6 Ways To Cut Your Inheritance Tax

Inheritance tax can be a difficult pill to swallow. It is not something that any of us want to think about, but it’s important to plan for the future & start planning now. In this blog post, we will explore 5 ways you can cut your inheritance tax so that when the time comes you won’t have to worry about it!
Calculating Your Propertys Value

Make A Gift To Your Partner

If you are currently in a relationship, one way to decrease your inheritance tax1 efficiency is by giving money or property to your civil partner.

Here’s how:

This can be done on their behalf so that the transfer will not incur any inheritance tax. However, you should note that it might make sense for both civil partnerships to take out life insurance policies instead, as this may better protect them from unexpected financial risks.

Both spouses must file jointly and agree on who gets what.

Another option is for each spouse to sign an agreement with only themselves listed as beneficiaries before signing joint wills together later down the line if necessary. We recommend getting legal advice when doing this because there may be other ways of avoiding death duties alongside these steps mentioned here, which could work better for you.

Give To Family Members or Friends

You could also give it to your family and friends.

In this way, they will enjoy the benefit of whatever it is that you wanted to leave them while altogether avoiding death duties because technically speaking, they are not inheriting anything from you at all.

This is a straightforward technique to avoid death duties.

You see:

When you die, it’s the value of your estate before any taxes paid on what remains after everything has been taken out that will be considered for inheritance tax purposes.

If you have money in an investment account and give it away within seven years of when you pass away, then technically speaking, they are not inheriting anything from you at all, and so no Inheritance Tax would apply.

Put Things Into A Trust

This is a straightforward technique to avoid death duties. When you die, it’s the value of your estate before any taxes paid on what remains after everything has been taken out that will be considered for inheritance tax purposes.

Now:

If you have money in an investment account and give it away within seven years of when you pass away, then technically speaking, they are not inheriting anything from you at all. So no Inheritance Tax implications would apply. Put things into a trust and have it distribute the money over some time.

Distribute Assets To Your Loved Ones During Your Lifetime

If you’re thinking about how to decrease your Inheritance tax bill, this is an option that might not be so obvious but will enable you to tailor how much they receive depending on their needs and circumstances.

Granted, with all these options for reducing death duties we’ve talked about here today, all require action before you die for them to work effectively; distributing assets can help take some of the stings out by doing something that has no downside – giving a little more than planned right now.

Get advice from someone who specializes in Estate Planning and Taxation.

Leave Something To Charity

Just like making gifts directly to family members and loved ones, it may also make sense for you to donate some of your wealth while living to reduce what needs paying on death – there’s no point inheriting large amounts when charities would benefit from it more.

Take out Some Life Insurance

In many cases, life insurance2 premiums can reduce the amount of inheritance tax calculator payable on death.

Give your money away now and save it for later.

The bottom line is:

The only way to get around an inheritance tax bill is by giving up what you have while alive. Giving some or all of your wealth away will minimize any eventual liability – but not before taking advantage of investment opportunities within trusts to make more profit without paying capital gains tax-free gifts!

Common Questions

How to Avoid Inheritance Tax With A Trust?

How Do You Avoid Inheritance Tax Legally?

Do You Pay Inheritance Tax If Your Partner Dies?

Are there Any Exemptions From Inheritance Tax?

In Conclusion

To sum it up:

Inheritance Tax can be a difficult hurdle for many families to deal with. The tax is not high, but it can still represent a large chunk of your inheritance if you are not careful.

It’s not something that we like to think about or talk about, but it’s essential for anyone who has the foresight to plan ahead.

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