Product Description

Inheritance tax (IHT) is becoming a major worry for more and more people. Rising house prices have increased the value of typical estates to a level where more people are likely to face a large tax bill. The inheritance tax maze is complex and often hard to negotiate. "Giving and Inheriting" is an essential and comprehensive guide to estate planning and tax liability that will help you to reduce the tax bill faced by your heirs - ensuring your gifts go to your loved ones and not to the tax collector."Giving and Inheriting" answers questions such as: How do taxes on lifetime gifts and residual estates work and what can you do about them? How can you dispose of assets without being liable for Pre-owned assets tax (POAT) instead of IHT? With up-to-the-minute practical advice on estate planning from an acknowledged financial expert, this guide explains: tax-free gifts and ways of reducing your heirs' tax liability; how trusts can still be useful despite new rules; gifts to children and to charity; special considerations concerning property, such as equity release schemes; and, your rights as a beneficiary and how to renounce unwanted inheritance.

Product Details

• Amazon Sales Rank: #72067 in Books
• Published on: 2007-04-16
• Original language: English
• Binding: Paperback
• 224 pages

About the Author
Jonquil Lowe is an economist who worked for several years in the City as an investment analyst, and is a former head of the Money Group at the Consumers' Association. She now works as a freelance financial researcher and journalist and holds the Diploma in Financial Planning (formerly called the Advanced Financial Planning Certificate). Jonquil writes extensively on all areas of personal finance and is the author of several other books, including Pension Handbook, Be Your Own Financial Adviser and The Which? Guide to Money in Retirement, and is co-author of The FT Guide to Personal Tax.

Excerpted from Giving and Inheriting (Which Essential Guides) by Jonquil Lowe. Copyright © 2007. Reprinted by permission. All rights reserved.
Inheritance Tax:
Most people do not pay inheritance tax during their lifetime. Inheritance
tax on your death is a tax bill for your heirs not you. So you do not need
to worry about finding the money yourself to pay an inheritance tax bill.
But you might be worried about inheritance tax if:

You want to leave an inheritance. Many people like to know that, after they
are gone, they are still able to help their family and friends, especially
their children, by leaving them money or other assets. Inheritance tax can
take a big chunk out of what you leave.
Someone could face financial hardship when you die. Anything you leave to
your husband, wife or civil partner is normally exempt from inheritance
tax. But this exemption does not extend to an unmarried partner or other
people who may depend on you financially. For example, a partner, sister,
brother, daughter or son who lives with you might have to sell the home you
have shared in order to pay a tax bill on your death.
You want to set up trusts in your lifetime. Following changes in the 2006
Budget, most types of trust may now trigger inheritance tax bills in your
lifetime. Trusts are not just for people with complicated affairs and a lot
of wealth. They are useful, for example, where you want to make gifts to
children but want to avoid them squandering the money in the exuberance of
youth.
You don't like the idea of giving your wealth to the taxman! Most of us
feel we have struggled to accumulate a little bit of financial security and
don't want to see it going into the coffers of HM Revenue & Customs.

The scope of inheritance tax is, on the face of it, wider than that of CGT
because inheritance tax covers all assets - including money, as well as
houses, land, pictures, furniture and investments. Gifts made in certain
circumstances or between certain people or bodies are free of inheritance
tax. This applies to the following gifts, whether you make them during your
lifetime or as bequests in your will.

Gifts to political parties
A gift to a political party is exempt from inheritance tax, provided the
party has at least two MPs or polled at least 150,000 votes at the most
recent general election.

Gifts between husband and wife or between civil partners
Gifts between husband and wife or between civil partners up to any amount
are tax-free as long as the couple are not divorced (or the partnership
dissolved). Even a husband and wife or civil partners who are separated
benefit from this exemption. If the husband, wife or civil partner
receiving the gift is not `domiciled' in the UK, the exemption is limited
to a total of £55,000.

Gifts to charities and certain other bodies
This exemption from inheritance tax is similar to the equivalent one for
CGT. It covers outright donations and gifts of any amount to UK charities,
national museums and art galleries, universities, local authorities,
government departments and a number of other bodies, including, since 6
April 2002, community amateur sports clubs.

Gifts of national heritage property
The gift of certain property, such as works of art, to a museum, art
gallery, the National Trust or similar body, university, local authority or
government department may be exempt from inheritance tax. The transfer of
such property to the HM Revenue & Customs in lieu of paying inheritance tax
is also exempt.

Eligible property can include pictures, prints, books, manuscripts, works
of art, scientific objects, provided they are `pre-eminent' for their
national, scientific, historic or artistic interest. Buildings and land of
outstanding scenic, historic or scientific interest and items associated
with them are also eligible.

A gift of eligible property to anyone else can be conditionally exempt from
inheritance tax. To qualify, the person receiving the gift must agree
certain conditions with HM Revenue & Customs, including that the gifted
property will stay in the UK, it will be properly maintained and preserved,
and the public will have reasonable access to it.

Housing Associations
Gifts of land to a Registered Housing Association are exempt of inheritance
tax.

Customer Reviews

An essential read
A friend bought this book for me after my father went into a care home and we decided that we didn't want the family money to go to the taxman. I found this book very useful, especially the chapters on capital gains and property. The author writes very clearly and there are lots of boxes and charts and checklists so the daunting subject of inheritance is made very simple indeed.
Overall I would recommend this book to anyone trying to sort out their finances in later life.