inheritance tax

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inheritance tax

broadly, a tax on wealth transfers i.e. gifts made in lifetime or on death. The main charge is on everything beneficially owned at death, including property in which the deceased had an INTEREST IN POSSESSION. To prevent deathbed gifts being used to avoid the tax, gifts made within seven years of death are also charged but are POTENTIALLY EXEMPT TRANSFERs (PET) in the meantime. However, some lifetime gifts are immediately chargeable if the assets are transferred into certain types of discretionary trust. Whilst within such trusts and on exiting them, the assets are liable to a special regime of inheritance tax. The territorial scope of the tax is determined by the domicile of the individual. Those who are domiciled in the UK are chargeable on their worldwide assets and those who are not on assets situated in the UK. The value chargeable may be reduced by AGRICULTURAL PROPERTY RELIEF or BUSINESS PROPERTY RELIEF. Exemptions can apply for small gifts, maintenance payments, wedding gifts, gifts to charities and national museums and certain other bodies. Some of these exemptions have monetary limits. There is a taxable threshold below which the rate is zero. Earlier gifts obtain the benefit of this threshold before later gifts. In determining the tax on the assets held at death, a deduction is allowed for funeral expenses and debts outstanding, including any unpaid taxes. The primary responsibility for paying the tax relating to a lifetime gift which has become chargeable falls upon the recipient. Tax payable on the estate of the deceased is primarily payable by the executors, except to the extent of any tax relating to property held in a trust in which the deceased had an interest in possession, which is payable from the assets of that trust. It is possible to vary an inheritance after the death if all the beneficiaries who would inherit less as a result of the change so agree. This can result in significant reductions in the inheritance tax liability. However, the variation must be made within two years of the death and the instrument of variation must state that it is to take effect for inheritance tax purposes. Any inheritance tax is calculated as if the variation was effectively backdated to the date of death. A similar provision can be applied for CAPITAL GAINS TAX.
References in periodicals archive ?
No IHT is payable if you pass your home to your spouse or civil partner when you die.
IHT currently has 28 advisors in its network, while the US Wealth Management network consists of 30 advisors.
Larger gifts can be made but for them to clear IHT the person making the gift must live for seven years.
Individuals transferring property into trust during lifetime in excess of PS325,000 (PS650,000 for married couples) will generally suffer an IHT charge of 20% on that excess.
At present, you can pass on any assets to another individual without paying IHT so long as you survive for seven years, although you do need to be careful that the gift does not incur capital gains tax.
But with careful planning, there are ways in which you can reduce the amount of IHT you may have to pay or even remove the liability altogether.
However, they must remain invested for two years to qualify for IHT relief.
This is known as a Deed of Variation and it can be used to deliver immediate relief from IHT.
The IHT Sports Business Summit is unique in that, as well as traditional conferences sessions, IHT sports journalists will host conversations with formidable sports leaders such as the Chairman of Chelsea FC, Bruce Buck and Jin-Sun Kim who is heading up the 2018 Winter Olympics in South Korea.
The company said that using its Profiler, an application performance management solution based on Network Behaviour Analysis (NBA), the IHT will gain the visibility needed to ensure uninterrupted service between key news hubs in Paris, Hong Kong and London, in addition to its extended bureau network.
The content, according to a memo sent out on Tuesday by IHT Publisher Stephen Dunbar-Johnson and NYTimes.