Inheritance tax can be very costly, however there are ways that you can reduce it.
How can I reduce my inheritance tax bill
There are a number of ways in which an individual can reduce their inheritance tax bill. The issue we find is that there are simple ways to reduce the inheritance tax bill, but people sometimes put this in the “I’ll look at it later” box.
Areas where people can significantly reduce the inheritance tax is by utilising their nil rate bands or their main resident nil rate band. Secondly, have a look at charity donations. If you give 10% of your death estate to charity, then that will reduce the overall percentage of tax, charged on your death.
We can look at trusts. Trusts will fall outside of your death estate. People are using family investment companies more often now whereby it is a company wrapper where we can put assets to go down to future generations. We can look at giving assets away, as long as that’s done within a 7 year window, it will fall outside of your death estate and not be subject to inheritance tax.
Or, alternatively, the most enjoyable way is just to spend it!