While the tax rate is fixed, it is entirely possible to reduce the value of your estate to lower the amount of IHT.
- Leave 10% of your estate to charity.
- Leave your estate to your spouse or civil partner.
- Give away up to £3,000 per year in gifts.
- Pay into a pension instead of a savings account.
- Give away gifts of any value. However, if you die within seven years of making the gifts, the people who received them may have to pay IHT.
Who is Responsible for Paying IHT?
If there is a will, it is the role of the executors to pay IHT. If there isn't a will, it is the court-appointed administrator's responsibility. The tax is paid from the estate's funds or by money generated from the sale of assets. There is a time limit for when the tax has to be paid, and that is by the end of the sixth month following the person's death. After this time, interest will be charged.
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