Inheritance tax burden can be minimised
by Sarah Ashcroft
People who are savvy when making a will
may find they can reduce the amount of tax paid on their estate, a financial expert has pointed out.
Inheritance tax is not payable on any amount less than £325,000, noted personal finance expert from SavvyWoman.co.uk Sarah Pennells, but anything over this will be charged at 40 per cent.
This is quite a large sum to pay, so she recommended giving away some money before death, as this will not be taxable.
"You can give away £3,000 a year to whoever you want to. You can also make unlimited gifts of £250 to anybody you like, but you can only give £250 to that person," she explained.
Ms Pennells also indicated that there is another way round inheritance tax, known as a potentially exempt transfer, or the seven-year rule.
This enables an individual to give away as much money as they please, but they have to survive for at least seven years after the payments have been made.
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Published on: August 11, 2011
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