Inheritance Tax – A tax (currently standing at 33%) that arises when an individual (the successor) receives assets by way of an inheritance due to someone passing away (the disponer).
Who pays the Inheritance Tax? – It is the person receiving the inheritance or the gift (the successor/donee) who is liable for the tax, not the person providing the inheritance or gift (the disponer).
Tax-Free Thresholds – Beneficiaries can inherit assets that are exempt from inheritance tax. Tax-exemption thresholds are based on the group the beneficiary is in.
What is taxable? – Any asset (i.e. cash, land, investments, property, etc.) will be liable to inheritance tax if:
Point to Note: Inherited Pensions are subject to tax at a rate of 30% and tax-free thresholds do not apply.
Inheritance Planning is important for everyone. If you are planning to leave assets after your death to certain people, some of the questions below may need to be considered.
Covering the Inheritance Tax liability – Section 72 Whole of Life Insurance policy taken out by the insured person on his/her own life will be exempt from inheritance tax insofar as such proceeds are used to pay inheritance tax. Simply put, under section 72, the proceeds of a client’s life insurance policy are used to pay the inheritance tax that their family may incur from inheriting assets.
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