Samera Business Advisors
Samera Business Advisors
Samera Business Advisors are leading UK Dental Business Advisors. On this blog, we share our tips, ideas and expertise to our readers across the UK and beyond. This blog is a must-read for dentists seeking to buy, build, or sell a dental practice.
Blog By:
arunmehra
arunmehra

Inheritance Tax Issues

Inheritance Tax Issues

6/29/2018 3:37:49 AM   |   Comments: 0   |   Views: 38

40% is the rate of inheritance tax due on the chargeable value of an estate for any dentists, above the nil-rate band.

That is a substantial amount of money to pay and can often mean having to sell an asset just to pay the tax due.

The current nil-rate band of £325,000 has been extended by an additional £100,000 main residence nil-rate band. This is for an estate if the deceased’s interest in a residential property, which has been their residence at some point and is included in their estate, is left to one or more direct descendants on death. However, even then this only takes the nil-rate band to £425,000, and your main residence alone can take you above this limit.

If the property passes to your husband, wife or civil partner when you die there is no Inheritance Tax to pay. If you leave the home to another person in your will, it counts towards the value of the estate.

Give away your home?

A simple way to avoid this situation is to give away the home. In which case it would be a potentially exempt transfer. No tax will be due should you survive 7 years.

If you want to continue living in your property after giving it away, you’ll need to:

                
  • pay rent to the new owner at the going rate (for similar local rental properties)
  •             
  • pay your share of the bills
  •             
  • live there for at least 7 years

The rent you pay will, however, count as taxable income for the receiving son/daughter.  But often the income tax on the rent will be substantially less compared to the 40% inheritance tax that could arise on the value of the property.

It is also possible to give away part of the property. But only if you think you will be marginally over the nil-rate band. If you don’t survive 7 years taper relief will apply, however, careful planning is needed here.

If you are affected by the above and would like to discuss tax planning in this area please email me on david@samera.co.uk to discuss.

All content originated from www.samera.co.uk

More Like This

Total Blog Activity

769
Total Bloggers
7,903
Total Blog Posts
2,961
Total Podcasts
1,297
Total Videos

Sponsors

Townie Perks

Townie® Poll

Do you allow parents into the operatory?
  

Site Help

Sally Gross, Member Services
Phone: +1-480-445-9710
Email: sally@farranmedia.com

Follow Dentaltown

Mobile App

WITH DENTALTOWN . . . NO DENTIST WILL EVER HAVE TO PRACTICE SOLO AGAIN®

WWW.DENTALTOWN.COM - WHERE THE DENTAL COMMUNITY LIVES®

9633 S. 48th Street Suite 200 • Phoenix, AZ 85044 · Phone: +1-480-598-0001 · Fax: +1-480-598-3450
©1999-2019 Dentaltown, L.L.C., a division of Farran Media, L.L.C. · All Rights Reserved