All That You Should Know About Inheritance Tax
Inheritance taxes are taxes that are levied on the estate of someone who has passed away. And this includes all the property and related possessions, as well as the cash the deceased acquired while they were alive. If you have been tasked to handle the inheritance tax of your loved one, and you feel you aren’t informed when it comes to this, it is essential that you go through this article.
In essence, you need to put into perspective two primary aspects so that you can deal with your inheritance tax. Fundamentally, it is the state that offers the threshold, and many aspects, it is about who is in power plus their general attitude when it comes to inherited wealth. At the moment, the inheritance tax threshold stands at 325,000 per person that is as from April 2016.
First, you need to list out all the assets, and make sure you determine their exact value at the date of death. Remember to deduct all the liabilities and debts. What’s more, you need to see to it that you keep a clean record of how you arrived at the values that you have noted; it should offer that impression of an estate agent’s valuation.
You see, the tax authorities may want to see your records even twenty years later after your inheritance tax has been paid. Be sure to include money stashed in banks, land, jewelry, cars, shares, property, insurance pay-outs, jointly owned assets in your valuation. It is also recommended that gifts that are in form of cash and assets such as cars should be included, that is they were awarded seven years before the death of the person in question.
It has an implication that the person benefitted from them, and so should be taxed as well. Liabilities and debts diminish the value of the dead’s chargeable estate. These liabilities may include credit card debts, some funeral expenses, household bills, mortgages and even gambling debts, just to mention but a few.
And then there is the uncomfortable question of who pays the inheritance taxes. More often than not, there are wills that were left behind. In cases where death happens without a warning; and there is no will, it is the administrator who does this.
You may be wondering if you have a chance to reduce or minimize the inheritance tax. And yes, you can do this. Notwithstanding the fact that you may have to seek legal assistance when doing this, and make sure you are dealing with someone who has the best skills and competence that you need. You may need to take advantage of the gifts that are available. It is crucial for you to note that you can take advantage of these gifts if you receive them seven years before the death occurred. From here, every exacting criteria will applied. If you do not have an idea of where to begin this, you should be sure to seek assistance from a probate attorney.