Start planning today to spare your family from a potential Inheritance Tax bill tomorrow. Here is your Inheritance Tax Checklist:
- The main ways to avoid Inheritance Tax are to spend your money while you are alive or give it away.
- Work out how much IHT might be due on your estate and regularly review it so you know what potential liability there is.
- Find out if the rules which took effect from October 2007, which mean that married couples and registered civil partners can now make use of each other’s tax-free allowance without special tax planning, apply to you.
- If you set up special Wills to deal with IHT, review them to see if they are still relevant.
- Make full use of any tax-free gifts you can make whilst you are alive.
- Put life insurance policies under an appropriate trust.
- If there’s going to be a big IHT bill, think about taking out an insurance policy for your heirs to pay the bill.
- Make a Will if you don’t have one – otherwise the people you want to inherit may not.
- Anything you leave to charity is free of IHT, so it can be a useful way of reducing your potential IHT liability while benefiting a good cause.
- Never take steps that might leave you struggling for money while you are alive in order to save tax after you’ve died.