What is Inheritance Tax? – UK IHT Explained
What is Inheritance Tax, who takes it and what for?
Inheritance Tax (IHT) is charged by the UK taxman on your estate when you die (with certain significant exceptions), retrospectively on any gifts made to individuals in the last 7 years before your death and when using some types of Trusts to pass on wealth or assets.
The amount the Government takes from Inheritance Tax continues to grow, having virtually doubled between 2009/10 and 2015/16. Your Inheritance Tax liability depends on your domicile (generally your motherland, or possibly your adopted motherland) rather than where you live, and as such even those living overseas, away from the UK, can be caught in the tax net. It also catches most UK assets for those not domiciled here.
IHT is here to stay – the tax represents a significant proportion of income for HMRC. Therefore it makes sense to plan accordingly to ensure that its effect is reduced, or even eliminated.