As we age and get older, it's more crucial to understand the idea of inheritance tax, and all that goes with it. It's easy to ignore the subject of this issue, with a lot of people looking to the present instead of contemplating the future. After someone dies the government analyzes how much their estate is worth, including their home, investment, and business.
If the value is greater than the threshold for inheritance tax which is 40 percent, the tax is assessed on everything beyond the threshold. The current threshold is referred to as the nil-rate band which is PS325,000. You can know more about inheritance tax planning via inheritance-tax.co.uk/area/inheritance-tax/.
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Regarding your mortgage, if you and/or your spouse pass away and you have a mortgage that is still on your property, it has to be paid first, thereby reducing what your property is worth. If your entire wealth is held in your home, you can prefer an equity release plan that will allow you to let go of some of your assets, either to pass to your heirs or to be used to pay for yourself.
Remember, however, that your estate may be less valuable over the long term. A lot of people prefer to hold on to their mortgages and have switched to interest-only agreements. By maintaining their mortgage and making sure that their assets do not exceed the threshold for tax, they are able to give cash gifts to loved relatives.