Property Inheritance Tax in London

When you die, your property may be subject to inheritance tax. This is a tax that the government will require you to pay on the value of assets transferred to your heirs, such as properties and assets they inherit from you.

Introduction

The property inheritance tax is a tax applied to all properties that have been left by individuals. This includes both living and non-living properties, and it has the potential to apply to both inherited businesses and residential property. This means that the terms ‘inheritance tax’ and ‘property inheritance tax’ can often be used interchangeably. Sometimes this is also referred to as estate and gift tax as well. 

This inheritance tax includes land and estates in the UK for inheritance after death. Inheritance Tax was introduced by HM Treasury in 1894 as a way of making England more progressive and is currently collected by Revenue & Customs from the deceased estate’s beneficiaries.

The UK Inheritance Tax System

In London, for example, the council can charge a death duty up to 40% on the estate property. For example, if you died with £2million in your bank account, your executor might have to pay £800,0000 in tax. The UK’s Inheritance Tax System is one of the most progressive tax systems in the world. 

Under the terms of this system, an individual can pass on their property to as many people as they want without incurring any inheritance tax at all. There are exceptions to this rule, which include a family home and property used solely for business purposes.

How to avoid paying inheritance tax

London, the capital of the UK is one of the most beautiful cities in the world, and it’s also one of the most expensive. With this comes a hefty price tag on property that leaves many people bereft when their loved ones pass away.

Inheritance tax on the property can be a large sum of money. If you inherit an estate, you may be liable for a high amount of inheritance tax, depending on the value of the property. To avoid paying inheritance tax, it is important to ensure that ownership of a property is passed through trusts and parents in order to avoid any taxes due.

Another way that you can avoid paying inheritance tax is to give your property as bequests instead of selling them – this will leave you with enough money to pay for taxes without having to sell off your assets at a low price.

The knowledge and experience of tax advisors

The property inheritance tax is the most important of all inheritance taxes in Europe. The UK has the lowest rates and as of 2013, it’s even possible to avoid inheritance tax altogether if your inheritance has a value below £325,000. There are many legalities related to inheritance tax that can be best explained by a tax advisor. 

If you are considering a foreign property inheritance worth more than £150,000 in the UK and you want to find out your rights and tax liability, it’s highly recommended that you seek advice from a qualified professional.

Summary

The property inheritance tax in London is designed to ensure that the wealthiest individuals pay their fair share of taxes. It is a progressive tax, meaning that it increases as the value of property increases. The tax ranges up to 45% on any inheritance of more than a million pounds.