What is inheritance tax?

Legal Question!What is the Inheritance Tax rate in the UK? ( money inheritance )?

• If I receive a substantial amount of money as inheritance, will I have to pay any tax from it? If, so .How much?

• Answer:

  40% on anything over £285k, but I think is due to be increased. You can do things quite legally to limit the amount over the limit subject to the tax. The issue isn't money it is assets. E.G. you could be left 20K in bank accounts. 20K in shares(at market rate) and a 400K house at market value. You would then have to pay the tax on the difference (155k) at 40% or £62k this could force you to sell the roof over your head in certain circumstances. If you suspect you are going to be placed in this position then you should sit down with your benefactor and suggest they seek legal advice to limit their tax liability. You can give a gift every 12 months (£3K I think, needs checking) without tax to be paid. Items can be given in advance(antiques) if the giver survives 7 years after the gift they do not form part of the estate so no tax is due. Currently money can be placed in trust(be careful here as I think the law was being changed following the last budget to restrict this avenue) Also inheritance can be shared around, e.g. I understand If a parent makes a will leaving most to their spouse this only becomes liable after the spouses death, they can take the opportunity to leave up to the £285K limit per at that time to other family members and the surviving spouse will be able to do the same in their will doubling the total tax free inheritance