If your estate (property or possessions) is worth more than £325,000 (Inheritance Tax Threshold) when you die, then you are required to pay Inheritance Tax (IHT). Despite this fact, there are some ways which you can implement to avoid your tax bill.

To know what they are, read on the points below.

Make a gift
When you are married or in a civil partnership, giving away anything you own as a gift to your partner will be free from Inheritance Tax but is only available if you live in the UK permanently.

The gifts you provide may be tax-free providing, you survive for seven years after giving the gift. At the same time, any gifts made less before death count towards the Inheritance Tax Threshold.

In case of gifts worth of £3,000 given by the deceased in each year (6 April to 5 April), the estate doesn’t have to pay Inheritance Tax.

Take out your life insurance
Insurance is a great option for covering a tax bill. On the other hand, if you are young, the cost may be high so you can get your family and heirs to pay the premiums. Even though it may be difficult for your family to pay the amount at the moment, eventually they are the ones who will be benefitting from the insurance amount.

Put your policies into a trust
If you put your properties into a trust, they are no longer a part of your estate. Likewise, if you have life insurance that you want to be paid to your heirs after your death, you need to put the policy under trust. That is because such policies do not count towards your estate while the Inheritance tax bill is calculated.

As the rules around trusts are very complex, it is better to take advice and guidance from an expert before making any move.

It is usually the executor of your will or administrator of your estate who will pay your inheritance tax bill. So, you need to make sure to hire an independent specialist adviser who can deal with such matter.

If you want any advice on inheritance tax, feel free to contact and meet our specialist team of accountants today.