When a person dies, the government is analyzing how much real they deserve – including their property, investment, and business. If this value exceeds the threshold of inheritance tax, a 40 percent tax is charged on anything above that threshold. Currently, the threshold, known as the nil-rate band, is £ 325,000. That means that if a real person is equal to or less than £ 325,000, the tax is free and all can be left to their beneficiaries. Anything over £ 325,000 is charged at a rate of 40 percent – nearly half the value of the assets. This only emphasizes the importance of planning for your future and makes sure that you pay a little attention to the inheritance tax planning.
You can also learn more about inheritance tax via http://www.tabifa.com/in-heritance-tax/.
In connection with your mortgage, when you and your spouse die and you still have the remaining mortgage on your property, it is important to pay it first. If all of your wealth is tied up in your home, you can choose an equity scheme, which can help you to release some of the value of your assets to pass on to heirs or to spend on yourself.
Remember, your estate will be worthless in the long run. Many people who choose to keep their mortgage and switch to offer interest-only – to keep their mortgage, ensure that their assets are less than the tax threshold.
There are a number of ways in which you can try to reduce the amount of taxes to be paid on your estate. Giving gifts to family and friends (such as helping your child onto the property ladder) would be an ideal way of spreading your estate.