Paying inheritance tax – important things you need to know

Familiarize yourself with inheritance tax and understand how it can affect your estate and your beneficiaries.

15:14 26 February 2013

If you’re worth more than £325,000 and you passed away, the money that your beneficiaries will inherit is subject to 40per cent inheritance tax. 

The executor, personal representatives of the deceased person, or the administrator are usually the ones responsible for paying the tax. However, this isn’t always the case. 

 

If the transfer is made out of trust, the trustee usually pay the inheritance tax every ten years from the time that the initial transfer into trust or when the trust beneficiary dies. 

 

There is a deadline for paying inheritance tax, which is usually about within six months of death. However, if the assets are in form of property, the tax can be payable over a ten year period. 

 

Inheritance tax can be paid using different sources such as building society or the bank account of the deceased person, national heritage property, transferring a National Trust Property to the crown, any government stock held by the deceased, or your own personal funds. 

 

When computing the total amount of inheritance tax, once must start in determining the exact value of the state. This means combining the value of home, car, bank accounts, investments, and other assets of the deceased. If that exceeds £325,000, 40per cent of that amount is the inheritance tax.