{"id":1242,"date":"2015-04-29T14:32:55","date_gmt":"2015-04-29T14:32:55","guid":{"rendered":"http:\/\/www.newsfin.co.uk\/news\/?p=1242"},"modified":"2015-04-29T14:32:55","modified_gmt":"2015-04-29T14:32:55","slug":"what-a-relief","status":"publish","type":"post","link":"https:\/\/www.vizionwealth.co.uk\/news\/what-a-relief\/","title":{"rendered":"What a relief"},"content":{"rendered":"

Assets that pass on free of Inheritance Tax<\/strong><\/p>\n

Inheritance Tax reliefs allow some assets to be passed on free of IHT or with a reduced bill.<\/p>\n

The executor of a Will or administrator <\/strong>
\nof an estate should claim the reliefs
\nwhen they’re\u00a0working out how much the estate is worth.<\/p>\n

Business Relief<\/strong>
\nBusiness Relief\u00a0allows a business to be passed on as a going concern by reducing the IHT on it by up to 100%.<\/p>\n

Agricultural Relief<\/strong>
\nAgricultural Relief\u00a0allows a working farm to be passed on as a going concern without paying IHT on it.<\/p>\n

Woodland Relief<\/strong>
\nYou don’t include the value of the timber in a woodland when you’re\u00a0working out the value of an estate\u00a0but must include the value of the land.<\/p>\n

Whoever inherits the woodland may have to pay IHT when they sell the timber \u2013 unless it qualifies for Agricultural or Business Relief.<\/p>\n

If the woodland also qualifies for Agricultural Relief or Business Relief
\n(for example, if it’s part of a working farm or business), it won’t qualify for Woodland Relief.<\/p>\n

Heritage assets
\nSome buildings, land and works of art which have historic or scientific interest may be\u00a0exempt from IHT.<\/p>\n

The assets must be made\u00a0available for the public to view\u00a0and meet other conditions to qualify as exempt.<\/p>\n

Heritage assets can also be\u00a0transferred to the Crown to pay an IHT bill.<\/p>\n

Passing on a home<\/strong>
\nHow much IHT is charged on a home depends on how the person who died owned it and how they passed it on.<\/p>\n

Passing on a home as a gift<\/strong>
\nIf a person passed on their home to their children (or someone else) before they died, it’s treated as a gift and the seven-year rule\u00a0applies.<\/p>\n

But if they continued to live in it rent free, their estate has to pay Inheritance Tax on the home even if they lived for seven years after giving it away. This is known as a ‘gift with reservation of benefit’.<\/p>\n

Giving away the home and moving out<\/strong>
\nThe original owner can make social visits and stay for short periods in a home they’ve given away without affecting the\u00a0seven-year rule.<\/p>\n

Giving away part of the home to someone who moves in
\nIf a person gave away half their home to their children (or someone else), who moved in and shared the bills, the half given away won’t be included in the valuation of the estate.<\/p>\n

Giving away the home and living in it<\/strong>
\nIf the original owner lives in the home after giving it away, they must pay the new owner a ‘market rent’ (the going rate for similar local rental properties).<\/p>\n

Selling a home and giving away the money<\/strong>
\nIf someone sold their home and gave the money to their children (or someone else), the money will be treated as a gift and the\u00a0seven-year rule\u00a0will apply.<\/p>\n

If they bought a new home as a joint owner with one or more others, the home may count as a ‘pre-owned asset’, and there may be Income Tax to pay on it.<\/p>\n

Leaving a home in a Will<\/strong>
\nWhen a home was wholly owned by the person who died, the value of the whole home is included in the estate for IHT purposes.<\/p>\n

When a home was owned by more than one person, only the share owned by the person who died is included in the estate for IHT purposes.<\/p>\n

Passing on a home to a husband, wife or registered civil partner<\/strong>
\nA widow, widower or bereaved registered civil partner automatically inherits the deceased’s share of the house if they owned the home as ‘joint tenants’. There’s no IHT if they continue to live in it.<\/p>\n

If they owned the home as ‘tenants in common’, each can pass on their share of the home to anyone else in their Will.<\/p>\n

Second homes<\/strong>
\nIf someone gives away a home that isn’t their main home, they may have to pay Capital Gains Tax\u00a0if the value of it has increased since they first owned it.<\/p>\n

Leaving assets to a spouse or registered civil partner
\nAn estate is exempt from IHT if the deceased left everything to their husband, wife or registered civil partner who lives permanently in the UK.<\/p>\n

Married couples and registered civil partners can give any value of\u00a0gifts\u00a0to each other during their lifetime without IHT being due on them.<\/p>\n

This is known as ‘spouse or registered civil partner exemption’.<\/p>\n

Transferring Inheritance Tax thresholds<\/strong>
\nIf someone’s estate is less than the IHT threshold of \u00a3325,000, the remaining threshold can be transferred to their husband, wife or registered civil
\npartner’s estate when they die \u2013 even if they remarried.<\/p>\n

This means the surviving partner’s estate can currently be worth up to \u00a3650,000 before any IHT is due.<\/p>\n

The transfer is made when the surviving husband, wife or registered civil partner dies, and is done by the executor of their Will or administrator of their estate when they work out how much it’s worth.<\/p>\n

Exceptions<\/strong><\/p>\n

The rules for transferring a threshold are different if:<\/p>\n

\u2022 The estate of the first spouse or
\nregistered civil partner qualified for\u00a0 relief on woodland or heritage assets
\n\u2022 The surviving spouse or registered civil partner had an unsecured pension as the ‘relevant dependant’ of a
\nperson who died with an Alternatively Secured Pension
\n\u2022 The first spouse or registered civil partner died before 1975<\/p>\n

Keeping records<\/strong>
\nThe executor or administrator of the estate should give the surviving husband, wife or registered civil partner documents that show any unused IHT threshold.
\nThese will be needed to transfer the threshold to the surviving partner’s estate when they die.<\/p>\n","protected":false},"excerpt":{"rendered":"

Assets that pass on free of Inheritance Tax Inheritance Tax reliefs allow some assets to be passed on free of IHT or with a reduced bill.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,7],"tags":[],"_links":{"self":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1242"}],"collection":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/comments?post=1242"}],"version-history":[{"count":0,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/posts\/1242\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/media?parent=1242"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/categories?post=1242"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vizionwealth.co.uk\/news\/wp-json\/wp\/v2\/tags?post=1242"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}