Taxation and revenue set is a worldwide occurrence. Tax money is used in the growth of a nation. In other words, authorities run on cash acquired via taxation and also a timely payment of taxation is a legal responsibility of every nation citizen.
In a few nations, an individual may face years of hard labor in prison while some are levied heavy penalties on tax evasion. Inheritance-tax is just one of those taxes which aren't present in a few other nations. Thornton & Baines provides you a brief knowledge about inheritance tax and its importance.
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Inheritance Tax (IHT) is a levy that is to be paid on any estate over the value of £325,000 for a single person or £650,000 for a couple these are known as the Nil Rate Bands
Upon death, if the estate including any assets held in trust and any gifts made within seven years of death is more than the previously stated threshold, then 40% of inheritance tax is due over the Nil Rate Band.
A charge to IHT arises when someone dies or when assets transferred are to a Discretionary Trust or to a Company. Inheritance Tax will only be payable if the estate on death or the value of the assets transferred is more than £325,000. When IHT is payable, the tax must be paid before the probate registry which will issue a grant of representation.
The UK government has recently introduced a new IHT nil rate band of up to £175,000 where the family home is passed to children or grandchildren. This is in addition to the current nil rate band of £325,000 which has been frozen since 2009. According to experts, the nil rate band will remain frozen for the next 5 tax years, until the end of 2020/21.