10 ways to pay less tax inheritance tax to HMRC before the end of the tax year

Inheritance tax: Financial advisor provides advice

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

The UK tax year is coming to an end on April 6 meaning there is just over a week for people to sort out their finances. However, savers and investors can still do some key things that could end up saving them thousands of pounds in 2022..

However, there are some measures people can take to pay less Inheritance Tax and make savings.

How to save money on inheritance tax:

  • Consider putting the property into trust
  • Be aware of Business Owner Exemptions
  • Donate a part of it (above the threshold) to charity
  • Gift up to £3,000 to family members and friends tax free
  • Give away assets seven years before one dies.
  • Make the most of wedding gift allowances (up to £5k)
  • Buy a funeral plan
  • Spend it
  • Be mindful of inheritance tax thresholds
  • Speak to an independent financial adviser

DON’T MISS:
DWP update: All the changes coming in April for Universal Credit [UPDATE]
Rishi Sunak’s National Insurance increase may impact state pension [ALERT]
State pension fury as older people get £2,251 LESS income a year [WARNING]

Another way to pay less tax to HMRC is to make use of pensions.

Emma Keywood, senior product manager at AJ Bell said pensions allow taxpayers to claim an additional 20 to 25 percent tax relief through their tax return.

She explained: “That means for a basic-rate taxpayer every £1 in your pension only costs you 80p and for a higher-rate taxpayer every £1 in your pension only costs you 60p.”

To take the hassle out of saving and investing after the April deadline, Ms Keywood also recommended setting up a direct debit.

Ms Keywood said: “This will automatically transfer the money into your investment account each month- maybe on payday.

“People can then set up regular investing on their platform, which will automatically buy the funds or shares you’ve chosen.”

“If you saved £200 a month into a cash ISA, earning the current average ISA interest rate of 0.19 percent you’d have a pot worth £24,250 after 10 years.

But if you invested that and earned 5 percent interest a year you’d have almost £31,700 – £7,444 more.”

What is happening where you live? Find out by adding your postcode or visit InYourArea

Some Britons may not be aware that there are rules and loopholes that could help them pass on more of their hard earned cash.

One way to massively reduce an inheritance tax bill is to make sure people don’t accidentally go over the threshold by gifting throughout their lifetime.

A parent could give their child up to £11,000 tax free in one year if they carried over an unused allowance and the child is getting married this year.

However, because it is a complicated subject, it may be useful to speak to an independent financial adviser.

Source: Read Full Article