With the standard rate of Inheritance Tax set at an eye-watering 40%, it is no surprise that many people will want to make the most of any available reliefs to minimise their Estate’s Inheritance Tax liability. Business Relief is a very useful tool for Estate Management as it can allow for 100% relief on your Estate’s Inheritance Tax bill!
Benefits of Business Relief:
- One way to avoid Inheritance Tax liability is to gift permitted amounts of cash throughout your lifetime to your loved ones. However there are limits to how much you can gift and the gifts you make during the 7 years before you die could still be liable for some, if not the full Inheritance Tax liability. Conversely, under Business Relief regulations a qualifying asset need only be held by you for the two years prior to your death to qualify for the Relief, which is a significantly shorter time period!
- Furthermore, you may wish to keep your Estate under your control rather than making gifts and gradually decreasing your worth over time. This is especially relevant if your chosen beneficiaries are your younger children for example. However by investing in assets that fulfill the Business Relief criteria, you still hold the value within your Estate, but that element will still be completely exempt from Inheritance Tax after your death.
- Similarly, this will mean that you can retain control of these investments and potentially grow your assets in order to leave a larger legacy behind. However, there is a risk that your investment could decrease, which is why you should seek professional advice regarding the potential effects on your Estate should your investments fail.
It is important to be aware that the regulations surrounding Inheritance Tax reliefs are complex and miscalculation of Inheritance Tax carries a heavy legal burden that could land you a hefty fine or even jail time! For these reasons it is always advisable to consult with a specialist in this field of the law when it comes to Estate Management. At Andrew Douglas Wills & Legal Services we guarantee you will receive expert, up to date advice from an experienced professional who will be your sole point of contact throughout your Estate Management process. What’s more, we offer a free no-obligation consultation to discuss your requirements so whether in Braintree or the surrounding areas of Essex, call today!
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