What is inheritance tax
Inheritance tax is a type of applicable tax imposed on the inheritance received by a beneficiary from the deceased. Typically, when inheritance tax is imposed, it is the responsibility of the beneficiary of the inheritance to pay the sum.
To see how inheritance taw can affect the opening of an offshore trust, please click on the following link to view our Offshore Trusts service page.
Inheritance tax requirements
Inheritance is typically awarded to the beneficiary or beneficiaries as a result of a Will made by the deceased, as a result of intestacy or through joint ownership of the assets.
Inheritance tax varies according the type of beneficiary receiving the inheritance. To further clarify, a spouse or civil partner receiving inheritance from their deceased partner will be exempt from inheritance tax regardless of inheritance value.
The amount of inheritance tax applicable to inheritance is dependant on a number of important factors. These include but are not limited to; value of the inheritance, the type of beneficiary and whether the inheritance is eligible for the “tax-free amount”.
Inheritance tax is also highly dependant on whether the country of the inheritance follows civil or common law. Statistics taken and valid between 2011-2015 indicate that a sum of £325,000 (UK) can be inherited without the requirement of paying inheritance tax. This sum is referred to legally as the Nil Rate Band. The inheritance tax free sum will vary according to the country and government laws, however in theUKan estate is charged inheritance tax of 40% after the Nil Rate Band.
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