ICASH PROOF OF TRUST FULL

When you receive a house as an inheritance, you may be liable to pay inheritance tax on it depending on the value of the estate – but when you come to sell it, the rules, and potential tax liabilities, change again.

ICASH PROOF OF TRUST FULL

It’s worth pointing out that heirs rarely pay for IHT directly it’s usually discounted from the value of the estate and is taken care of by the executors (unless the estate can’t or won’t cover the full amount, in which case the beneficiaries are liable). This rises to £1m if the estate includes property, as per the property transfer allowance. This means that, provided the first spouse to die didn’t gift a large amount away beforehand, couples can pass on up to £650,000 to beneficiaries tax-free. Married couples and civil partners can pass on their allowance to their spouse, too. This tax-free allowance is increased if the estate includes property that is being passed on to a direct descendant, with the transferrable allowance currently standing at £175,000, effectively bringing the nil rate band to £500,000 for many families. This means only the value of an estate above this level will be taxed at 40%, and if it’s worth less than this, there’ll be no tax for beneficiaries to pay. The tax-free IHT allowance for 2022/23 – known as the nil rate band – stands at £325,000.

However, inheritance tax (IHT) can be legally reduced or avoided in a number of ways (such as via gifting), and will only be paid on estates worth above a certain amount.

Under current rules, heirs could be subject to a tax bill of up to 40% on an estate, which includes any savings, property and any additional assets, after deducting any debts and funeral costs.

Icash proof of trust