Avoiding Inheritance Tax

There are several reasons that many people oppose having to pay inheritance tax. One reason is that they believe that they are already taxed enough by the government and they believe that an inheritance tax is unnecessary. Another reason is that when someone passes away and leaves an estate to a family or friend, that person that received the estate may feel like it is an invasion on the government's part. They believe that the estate, in its entirety, belongs to them and they should not be punished by having to pay a tax on it. Since so many people oppose of inheritance tax, there have been many that have tried to avoid it.

There are many ways to be exempt from having to pay inheritance tax. One way that you will not have to pay inheritance tax is if the estate given to you is under the minimum threshold, or the set value that the estate must be worth in order for you to have to pay inheritance tax. But, even if the estate given to you was above the minimum threshold there are other ways to avoid having to pay it. If assets are left to a spouse, they are not liable to pay an inheritance tax. Also, if the deceased left a charitable donation (to national schemes, employee trusts, or political parties) during their lifetime or in their will, then that donation is exempt from inheritance tax.

If you were to divide the assets given to you among other friends or family members so that the value of the estate that you have is less than the threshold, then you are now exempt from having to pay inheritance tax. Of course, you would have to give up some of the deceased's assets that were supposed to be given to you, but you will also not have to pay a 40%+ tax on the assets that you were originally supposed to receive.

Many people can avoid paying inheritance tax, but they don't do the research necessary to do that. Instead, they end up having to pay a large sum on an estate that was given to them as a gift.