HMRC set to punish UK households who 'didn't realise'
The standard Inheritance Tax rate is 40%. It's only charged on the part of your estate that's above the threshold.
Here is an example: Your estate is worth £500,000 and your tax-free threshold is £325,000. The Inheritance Tax charged will be 40% of £175,000 (£500,000 minus £325,000).
Teachers! Need some inspiration for your next lesson? 📢
Tax Facts is a free #TeacherResource to help pupils aged 8-17 understand the UK tax system.
Visit the link below to download ready to use lesson plans, videos and activity sheets. ⬇️https://t.co/6FsKEfH99P pic.twitter.com/ZvaKzo7683
Lorraine Wilson, principal associate in the private wealth team at national law firm Weightmans, warned that ever more people are being dragged into paying the tax "without realising it".
Ms Wilson said: "Someone giving away assets late in life may not realise that gifts made within seven years of death can still be taxed."
Ms Wilson said it is important to take "early action" to get your estate in order and think about your inheritance tax liability.
Recommended reading:
"For those whose wealth is tied up in property or investments, there are structured options like trusts or family investment companies.
"These can help you pass wealth down the generations while keeping some flexibility."
Last year, HMRC collected a record £7.5 billion from IHT. That figure is expected to grow, especially as more people are pulled into the tax bracket simply because of rising property values.
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