Reprieve in inheritance tax (IHT) is on the cards
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| Falling realty prices could well mean an unforeseen reprieve in inheritance tax (IHT). If a property gets sold at a value that is lower than the one used for calculating liability of inheritance tax, it could become possible for the estate’s executor to reclaim part of the tax paid, according to experts in taxation matters. However, a claim needs to be made just within four years of death of the persons who leave the house in their will. It’s quite possible that house prices in certain parts of the country might have fallen considerably in comparison to their value over a time span of last four years. As long as specific requirements are met, the 40% tax which is paid on the difference could easily be clawed back. In the coming months any individuals who find themselves in this position should get in touch with the executors who are needed to file the claim. Chancellor Alistair Darling kick announced changes to the tax that include an increase in the allowance for married couples that is IHT-exempt. Earlier, one spouse was allowed to pass on assets and property without any IHT tax being due. However, the estate would be big enough to draw an IHT bill when left to friends or family, after the surviving spouse died. In April, the surviving spouse will be allowed to leave an amount up to £600,000 without being needed to pay IHT. This has significant implications for estate planning. |
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