Inheritance tax: Britons ‘often forget’ actions which may slash bill by £130,000 or more | Personal Finance | Finance
Inheritance tax can often become complicated, but the central goal among many Britons will be to reduce their liabilities as much as possible. In so doing, they will leave more to family, friends and loved ones, rather than to the taxman.
But there are some issues which people may not be aware of when it comes to reducing their inheritance tax bill.
Express.co.uk spoke to Elaine Roche, Board Member at Solicitors for the Elderly, about this matter.
She said: “I think there are a few things people can often forget when it comes to inheritance tax.
“The UK tax system is quite complicated and there are a ridiculous number of reliefs and many experts couldn’t even list all of these off the top of their heads.
READ MORE: ‘Pay up!’ Man, 85, furious as his state pension is ‘frozen’ at £70
“I think normal expenditure out of income is something that people do not know about.
“I had another client where this was misapplied. This has to be against income, but this gentleman was selling shares each year and giving away the gain.
“That actually didn’t count, so what he thought was working, was doing nothing at all.”
Ms Roche also looked at the idea of the nil-rate band, which sets the threshold below which inheritance tax is not applicable.
She continued: “The transferable nil-rate band is reasonably straight forward, but this isn’t the case when it comes to the transferable residence nil-rate band.
“In fact, the residence nil-rate band itself is quite complex for people to navigate.
“For some people, they may think if they do not own a residence then they cannot claim it.
“But actually, you might be able to, as long as you had a residence after July 8, 2015. Even if you don’t have one now, you might still be able to claim.
“The tax saving for one residence nil-rate band is £130,000 – so it is well worth doing and knowing about.”
Once these key issues are considered, most people will be able to proceed without the looming worry of a hefty inheritance tax bill.
Ms Roche concluded: “There are all sorts of little things you can do to reduce your inheritance tax liability.
“However, it is knowing about these in the first place which is particularly important.
“This is why it can be useful to seek advice – for a couple of thousands of pounds on a solicitor, you could end up saving £130,000 or even more.”
