An Idiot’s Guide to Inheritance Tax

So What is Inheritance Tax?

Inheritance Tax (IHT) is a levy placed on an individual’s estate upon their passing. This includes property, money, or personal possessions. When applicable, a percentage of the estate’s value is payable by the beneficiaries.

What is the Going Rate?

The rate of IHT varies across jurisdictions. For instance a resident of the Isle of Man would currently pay 0% IHT and in Malta there is 0% IHT but a 5% duty on immovable property, compared to a whopping 40% inheritance tax for those in the UK.

Who Pays Inheritance Tax?

Anyone who benefits from the estate of the deceased can be liable including:
Children
Grandchildren
Parents
Siblings
Business Partners
Friends

How do They Value and Estate?

1. List all assets (e.g. money, property, cars, digital wallets)
2. Determine their value at the time of death
3. Deduct any debts or liabilities

How do People Reduce Their Inheritance Tax Liabilities?

There are a number of legal yet tax efficient ways in which people have reduced their inheritance tax liabilities, including:
✔️ Leaving a legacy to charity.
✔️ Placing assets into a trust.
✔️ Paying into a pension.
✔️ Setting up a life insurance policy.
✔️ Regularly gifting assets to loved ones.

What is the Golden Rule?

Always create a will and review it regularly. This ensures your wishes are honoured and your estate is distributed as you desire. Appointing a trusted executor is essential to oversee the process when the time comes.

Taking proactive steps today can help reduce IHT liabilities and secure your legacy for the future. However, it is crucial to obtain the appropriate professional advice before doing anything. If you would like to find out more about how you can secure your assets and protect your wealth for the future, or would like to discuss your requirements in more detail, contact us at:

☎ +44 1624 616544
📧 info@sentientinternational.com