Inheritance tax (‘IHT’) is often seen as the most unfair tax of all as it is effectively a “double tax”: on death you pay IHT on the value of assets acquired during your lifetime, which were paid for by money that had already been subjected to income or capital gains tax.
HMRC collected £3.7 billion in IHT in 2014, an increase of 11% on the previous year. The IHT exempt nil rate band which has been frozen since 2009, remains at £325,000. Rising property prices mean more and more estates may be pulled into the IHT net making even the smaller estates subject to IHT.
But with a little planning there are some simple steps that can be taken to mitigate IHT.
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