The Passing of a Loved One and the Effects on Tax Season

The Inheritance Tax and What You Can Do

11:55 28 March 2013

If a loved one has passed away recently in your life and you received an inheritance, you should be very aware of the Inheritance Tax that you will be responsible for.  The inheritance tax plays an important role in your tax planning for the first year after the death of a loved one.

 

You will have to pay the inheritance tax if your inheritance was more than £325,000. If the property and assets are over this limit, you may be forced to make some difficult decisions in order to avoid paying the Inheritance Tax on the possessions and property.

 

These changes can be selling off buildings, land, paintings and other valuables you originally wished to keep in your family.

 

There is an exclusion that may allow you to keep the inheritance without paying taxes:

 

• If part of the inheritance has value to the public of the United Kingdom, such as history of the area or a historical preservation, you may be able to claim an exemption. 

 

• The new owner must promise to look after the property which has been deemed of historical value.

 

• They must also let any person access to the property if he, or she, wishes to view or utilize it.

 

• The new owner must also keep the inheritance inside the United Kingdom if it is mobile property.

 

The downfall of this method is that you would have to follow the government advice and you may not want to share your family valuables with the public.

 

You may find yourself with the responsibility of employing security if you have valuables worth a significant amount.

 

You might have to invest in a security alarm for instance or some other type of protective equipment or service. When comparing the cost of Inheritance Tax to the benefits of an exemption, factor security costs in as well.