Inheritance Tax is chargeable on a person’s estate which falls above a particular threshold when they die. It is currently set at 40 percent, which means many families will have to confront the levy upon the death of a loved one. Understandably, as tax will reduce the amount of a person’s estate which can be inherited, many will wish to legally reduce or wipe out their Inheritance Tax bill, if possible.
Recent insight has shown UK taxpayers were able to save over £800million in Inheritance Tax last year alone, according to research by private equity investment firm, Growthdeck.
These individuals were able to make such a significant saving by investing in unlisted companies, making use of IHT relief.
This action enabled people to protect their wealth while also providing much needed capital to unlisted companies which have suffered financially due to COVID-19.
The firm has said many people are currently unaware of the IHT reliefs which are at their disposal, and could be missing out as a result.
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He said: “Making investments in unlisted companies is an easy way to protect wealth, reduce IHT and ensure that valuable assets are preserved and handed on to the next generation.
“It also helps fund a key part of the UK economy that often struggles to find equity investment.”
There are a number of ways to legally reduce Inheritance Tax, such as gifting, however a person must live seven years after the gift is given to avoid tax.
In addition, there are small gifts which can be given within a tax year which will be exempt from IHT.
“This helps to fuel the economic recovery and creates new jobs.”
There are concerns Inheritance Tax could be altered in the upcoming Budget which is just days away.
On Wednesday, March 3, the Chancellor Rishi Sunak will be tasked with steering Britain through the pandemic with his latest economic response.
Some experts have suggested Inheritance Tax could be changed in some way, while others have stated tax reliefs could be restricted.
Growthdeck has therefore suggested high net-worth individuals make use of tax reliefs in order to benefit from it while they still can.
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