Inheritence tax and capital gains tax

Inheritance Tax (IHT)

Inheritance Tax (IHT) is payable by individuals. It is both a tax payable on death and on gifts during your lifetime.

The first £325,000 of chargeable transfers by an individual is free of IHT. Accumulated transfers in excess of this, either at the time of death, or within the seven years preceding death are taxed at 40%, subject to some restrictions on transfers more than three years before death. For other lifetime transfers, the rate of IHT is 20%.

As with all capital taxes, the rules relating to the taxation of gifts and deemed gifts are complicated and there are numerous reliefs and allowances available to help mitigate the impact of IHT. There is of course no substitute for detailed & careful planning with an experienced professional.  

McCranors are here to help you in mitigating your IHT exposure.

The most effective way to mitigate IHT is to act early, as this allows careful & effective planning.
 
Where IHT liabilities are anticipated, we can explore steps to cover the settlement of such liabilities by taking out appropriate life cover policies.

Capital Gains Tax (CGT)

Capital Gains Tax (CGT) is payable to HM Revenue & Customs (HMRC) when an individual, trust or company sells, transfers or gifts property (tangible or intangible) to another entity.

McCranors can help you to take advantage of the numerous exemptions and reliefs available. Some assets are not liable to CGT, whereas others are liable at different rates. There is also an annual allowance, enabling individuals to make small gains on disposals each year, without paying any tax at all.

If you own anything of value and decide to sell it, you potentially fall within the realms of CGT. If you do not inform HMRC of your disposal, you could also be liable to penalties where HMRC feels it appropriate.

In many cases it is vital to have expert advice, even before you sell or transfer an asset, since planning for CGT provides an opportunity to mitigate the liability.

Call McCranors now, we’re here to help you plan your future.