We have to bear with the Death duties since centuries, masked as Capital Transfer Tax, Estate Duty, and now Inheritance Tax (IHT). Whatever may be the name, but the purpose is the same as to raise revenue from the estates of citizens. Inheritance tax is an inseparable part of UK taxation and legal system. However, most people seem pessimistic about adopting it fully and courts see countless cases related to inheritance law and its complications. In this connection, the government has been undertaking a reform process and changes are expected in the recent future. The persons living out of UK for more than 3 years in the time span of the 20-year tax period cannot apply for the inheritance-tax. Besides this, British people with overseas property are exempted from paying any inheritance-tax. However, if a person, for example, has transferred his property to someone seven years prior to his death, then the beneficiary will not be charged for any inheritance tax.
Inheritance-tax in the UK is imposed on those people who inherit monetary assets, properties, agricultural estates and houses with an aggregate worth of ?325,000 or more. Inheritance-tax is levied on those properties that are transferred to the survivors of the dead. Thus, a person who is about to die can nominate anyone to become a beneficiary and the only owner of his property. It is possible through a will that evidently denotes the shares in the assets and administrative duties, besides the other things. In the United Kingdom, if a person is willing to inherit his asset, he has to pay the inheritance tax at a fixed percentage. There are some laws made in regard of the inheritance tax. The system of law enacted in the United Kingdom states that when an individual inherits certain asset, a 40% tax is levied on the amount of the inherited property, above the Nil Rate band. The Nil Rate band for the year 2009/2010 is ?325,000.
In addition to this, taxation authorities have also arranged a fixed amount of interest on inheritance tax, despite the total value of an inheritance. From September, inheritance tax late payments will be levied for a flat rate of 3% interest. Revenue authorities have also decided to extend the scope of inheritance tax on agricultural concerns and family farms as well. The total inheritance tax ratios are also expected to be increased sooner or later. Eventually, the government is thinking to extract more money through taxes due to the fear of economic recession.