• Contact us
  • Privacy Policy
  • Sitemap
  • Disclaimer
Tuesday, March 21, 2023
NewsLiveNation
No Result
View All Result
  • Login
  • Contact us
  • Business
    • Economy
    • Finance
    • Insurance
  • Health
  • Lifestyle
    • Travel
  • News
    Twitter

    yesu_x Twitter: Biography and real identity

    Marcel Young: Read about the son of legendary rap singer Dr. Dre

    Lou Sulola Samuel: A Child Supermodel

    Lou Sulola Samuel: A Child Supermodel

    Michael Other’s Tiffany Roy Bio

    Michael Other’s Tiffany Roy Bio

    Coronavirus variants detected via covid-19 tests, labs suggest

    Coronavirus Variants Detected via Covid-19 Tests, Labs Suggest

    Trending Tags

    • Commentary
    • Featured
    • Event
    • Editorial
    • Entertainment
    • National
    • Politics
    • World
  • Opinion
  • Science
  • Tech
  • Contact us
  • Business
    • Economy
    • Finance
    • Insurance
  • Health
  • Lifestyle
    • Travel
  • News
    Twitter

    yesu_x Twitter: Biography and real identity

    Marcel Young: Read about the son of legendary rap singer Dr. Dre

    Lou Sulola Samuel: A Child Supermodel

    Lou Sulola Samuel: A Child Supermodel

    Michael Other’s Tiffany Roy Bio

    Michael Other’s Tiffany Roy Bio

    Coronavirus variants detected via covid-19 tests, labs suggest

    Coronavirus Variants Detected via Covid-19 Tests, Labs Suggest

    Trending Tags

    • Commentary
    • Featured
    • Event
    • Editorial
    • Entertainment
    • National
    • Politics
    • World
  • Opinion
  • Science
  • Tech
No Result
View All Result
Morning News
No Result
View All Result
Home Business

Inheritance Tax | What Is It and What to Do When You Can’t Pay

mindmingles by mindmingles
February 20, 2023
in Business
0
Inheritance Tax | What Is It and What to Do When You Can’t Pay
0
SHARES
412
VIEWS
Share on FacebookShare on Twitter

In the UK, only a small percentage of estates are subject to inheritance tax, or roughly 1 in 20 UK estates. If you are one of the beneficiaries or givers, it’s wise to do inheritance tax planning beforehand to avoid the hefty IHT bills or interests.  

There are several ways to do that, especially when you are the owner of the asset who doesn’t want the beneficiary to sell what you give them just to pay IHT. Inheritance tax planning is most crucial if you want to have the peace of mind that your beneficiaries really receive your assets, and not have to dispose of them for the sake of IHT liabilities. 

READ ALSO

What is a good expense ratio for a mutual fund and why it is important?

What Businesses Can Learn From Video Games About Marketing

However, we put ourselves on the perspective of the executor or administrator of the estate, not the owner of the asset, covering a brief and simple discussion of inheritance tax, how much you will pay for it, who pays exactly this tax, how it is paid, and most especially, what to do when you don’t have enough funds to pay IHT. 

What Is Inheritance Tax and How Much Do You Pay for It? 

Inheritance tax (IHT) is the tax you pay for an estate handed to you when the giver has died. The assets include any possessions, property, and money. Up until 2026, inheritance tax is at the standard rate of 40 per cent and is only paid when the asset’s value exceeds the nil rate band (NRB) or threshold on which you are free from tax, set at £325,000.  

Anything above that threshold, you will be liable to paying inheritance tax at a standard rate of 40 per cent. For instance, the beneficiary is left with an estate worth £500,000. Given your nil rate band of £325,000, the taxable amount will be £175,000. Forty per cent of this amount is £70,000, which is what you will pay for the inheritance tax.

This threshold can increase on certain situations, such as when the asset is given by the deceased person to his/her children or grandchildren (up to £500,000) or to a widower or surviving civil partner. When the latter happens, the surviving spouse can utilise the unused NRB of the deceased, doubling his/her NRB to £650, 000. 

Who Pays Inheritance Tax?  

When the deceased person has a will, he is called a testator and has already appointed the care of the assets to an executor, who is usually an accountant, a lawyer, or a family member, for as long as they are over 18 years of age and have no previous felony records.  

If there is no will, then the court appoints who the executor will be, but usually, it is the administrator of the estate’s default responsibility. In this case, you act as a personal representative, as there is no record of a will. 

You can be both an executor and the beneficiary too. If you are the executor, then you are responsible for clearing any debts the deceased person has, most especially the taxes they owe—inheritance tax—and carry forth the wishes of the said person.  

Executors are either paid or not for their efforts in handling the estate, and have the liberty to accept the testator’s payment or not. When you are given this responsibility, you are expected to settle it right away to avoid any charges from HMRC. 

How is Inheritance Tax Paid? 

After six months from the asset owner’s death, IHT should already be paid or HMRC will begin imposing interests. You can pay IHT through the funds within the estate or monies earned from selling it.  

As the executor, you can do “payment on account,” which is paying IHT on the first six months of the person’s death, even before the estate completed the valuation, to reduce any interests that could be charged on you if it takes you longer to sell the assets for the purpose of paying inheritance tax and other corresponding taxes. 

If you pay through your own account, then you can claim the expense back from the estate. However, IHT is usually paid through the Direct Payment Scheme (DPS) wherein the money used to pay IHT is from the deceased person’s own bank or building society account. As the executor or personal representative, you can arrange the tax bill to be paid directly through the scheme, whether in half or full. 

Don’t forget to check as well if the deceased person has arranged to pay inheritance tax through a whole-life insurance policy and made sure to pay all the premiums. They may be subject to inheritance tax nevertheless, but when the same person wrote the policy in trust, you will not have to pay IHT and undergo through the long probate process. 

Only when the tax and debts are paid that you can distribute the remainder of the estate to the beneficiaries, including yourself if you are one. 

What Happens When You Can’t Pay Inheritance Tax? 

While you can take a traditional bank loan, there is also the option of a private inheritance tax loan, which is most beneficial especially when you are an executor who is not a beneficiary and don’t have the money to patch up paying for IHT before the probate. Without funds to pay IHT, the estate will be locked and held up for the beneficiaries who want to make use of their inheritance as soon as possible. 

You might want to consider getting an inheritance tax loan as it requires little paperwork and can give the funds you need right away. Since it is not the same as a traditional bank loan, they don’t do credit checks and will not require you to own a home. There are no monthly repayments too as the loan is repaid from the estate proceeds. 

 

There is no need for a will, the lender directly settles IHT payments to HMRC, and the property will not be charged too. After the loan is granted, you can then apply for Grant of Probate in which the estate assets will allowed to be disposed of for the profits to be used to pay the loan.  

When you’re stuck with IHT obligations, work with a tax professional, such as Legend Financial. We know all the ins and out of this business and have served a lot of clients in the same situation on a daily basis. Trust your IHT affairs to us! 

 

 

Related Posts

mutual fund
Finance

What is a good expense ratio for a mutual fund and why it is important?

December 23, 2022
What Businesses Can Learn From Video Games About Marketing
Business

What Businesses Can Learn From Video Games About Marketing

September 23, 2022
Reliance
Business

How high can Reliance Industries’share pricesgo?

August 5, 2022
Scams in The Forex Currency Market
Business

Scams in The Forex Currency Market

July 13, 2022
Women-Owned Business
Business

10 Types of Loans for Women-Owned Business

June 17, 2022
promoting
Business

5 Ways to Promote Your Small Business

June 22, 2022
Next Post
Retirement

What is the Best Way to Plan for Your Retirement?

POPULAR NEWS

How To Make Self-Care A Part Of Your Routine

How To Make Self-Care A Part Of Your Routine

October 4, 2022
John Krasinski Net Worth

John Krasinski Net Worth: Is he the richest actor from the cast of The Office?

June 1, 2022
Alvin Louise Martin

Alvin Louise Martin: Everything you need to know about Whoopie Goldberg’s ex-husband. Where is he now? 

June 1, 2022
Pakistani court convicts 3 LeT and JuD leaders, including Hafiz Saeed’s brother-in-law

Pakistani court convicts 3 LeT and JuD leaders, including Hafiz Saeed’s brother-in-law

August 29, 2020

EDITOR'S PICK

UK retailer Marks & Spencer cuts 7,000 jobs due to pandemic

UK retailer Marks & Spencer cuts 7,000 jobs due to pandemic

August 18, 2020
RPSC Assistant Professor Recruitment 2020: Applications for 918 Posts to Reopen from December 21, Check Updates- results.amarujala.com

RPSC Assistant Professor Recruitment 2020: Applications for 918 Posts to Reopen from December 21, Check Updates- results.amarujala.com

December 19, 2020
More bodies found at Myanmar jade mine disaster

More bodies found at Myanmar jade mine disaster

July 3, 2020
US Ends Boeing 737 MAX Flight Ban After Crash Probes

US Ends Boeing 737 MAX Flight Ban After Crash Probes

November 18, 2020

About

newslivenation.in


newslivenation.in is an open platform for people who loves to read and write. You can gather information or share your views in your words here. We will always be happy to provide the most recent facts, technological news etc. Happy reading!

Follow us

Tipes

Watercolor Portraits from Photos

March 17, 2023
Travel

Zanzibar to the Mainland: A Tanzania Island-Hopping Experience

March 14, 2023
Education

How to Learn Advanced Excel in Just One Day?

March 15, 2023

Watercolor Portraits from Photos

  • Contact us
  • Privacy Policy
  • Sitemap
  • Disclaimer

Copyright © 2022 All Rights Reserved | Powered by Newslivenation

No Result
View All Result
  • News
  • Politics
  • National
  • Business
  • Finance
  • World
  • Entertainment
  • Fashion
  • Food
  • Health
  • Lifestyle
  • Opinion
  • Science
  • Tech
  • Travel

Copyright © 2022 All Rights Reserved | Powered by Newslivenation

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In