2024 Autumn Budget WARNING Inheritance Tax Changes You Can't Afford to Miss

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What is Inheritance Tax?
Inheritance Tax (IHT) is a tax on the estate of a deceased person, which includes their property, money, and possessions. It is charged on the value of the estate over a certain threshold, known as the nil-rate band.

Key Features:

Nil-Rate Band:
As of April 2024, the nil-rate band is £325,000. This means that if the estate's value is below this amount, no inheritance tax is payable. If it's above, the excess is taxed at a rate of 40%.

Residence Nil-Rate Band (RNRB):
If the deceased leaves their home to direct descendants (children or grandchildren), an additional allowance known as the residence nil-rate band can apply. This can add up to an additional £175,000 to the threshold, depending on the value of the home.

Gifts and Exemptions:
Certain gifts made during a person's lifetime may be exempt from inheritance tax, such as gifts to spouses, civil partners, or charities. Additionally, small gifts up to £250 per recipient, annual gifts of up to £3,000, and wedding gifts can also be exempt.

Potentially Exempt Transfers (PETs):
Gifts made more than seven years before death are usually exempt from IHT. However, if the donor dies within seven years of making a gift, the value of the gift may be included in the estate and taxed accordingly.

Trusts:
Assets placed in certain types of trusts may also be subject to inheritance tax, depending on the type of trust and when it was established.

Filing Requirements:
An inheritance tax return must be filed if the estate's value exceeds the nil-rate band. This includes providing details of all assets, liabilities, and gifts made within seven years of death.

Keywords and Hashtags
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