Inheritance tax loopholes: 15 ways to pay less to HMRC | Personal finance | Finance
That’s according to recent research by Hargreaves Lansdown which says the tax is hated by many Brits because, rightly or wrongly, they think they are being taxed twice.
Much to the dismay of many Britons, HM Revenue and Customs (HMRC) expects to collect £6.9billion in inheritance tax in 2023.
Inheritance tax is a tax paid by a person who inherits money or property from the estate of a deceased person.
The standard inheritance tax rate is 40% and is commonly referred to as “death tax”.
While much of this is due to rising property prices, which means many more people are caught in the net, a significant part is also due to ‘gifts gone wrong’.
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Experts say it’s very easy to make mistakes because the tax system is so complicated.
In 2020, the nation gave away £125m in unnecessary inheritance tax (IHT) through ‘gifts gone wrong’.
Married people can give all their assets to a partner without having to pay the 40% levy.
However, when they die, there could be a hefty bill to pay if the rules are not followed for gifts to children and grandchildren.
Meanwhile, Brits should also check whether they could carry over a tax break from last year to lower their bill even further.
A parent can gift their child up to £11,000 tax-free in a year if they defer an allowance and have to marry.
That’s because they can offer £5,000 in return for the wedding, plus this year’s £3,000 annual exemption and last year’s if it hasn’t already been used.
For more advice, people can search for ‘Inheritance Tax’ on Gov.uk.