Inheritance Tax has been called a ‘voluntary tax’. However, over the years it has become much more difficult to avoid, and it can be a burden for many families. In broad terms, it applies to most assets over any available Nil Rate Band upon death at a rate of 40%, depending on the terms of the will. With this band being frozen at £325,000 for some time it means that more estates will be subject to Inheritance Tax.
Many people fail to appreciate that, if they die within seven years from making a lifetime gift, this could still make up a part of the Inheritance Tax calculation. A liability can also arise on gifts into trust at the time of transfer. It is therefore more than just a ‘death tax’.
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