What is inheritance tax? - MoneyWeek Investment Tutorials

Like this MoneyWeek Video? Want to find out more on inheritance tax?

Search our whole archive of useful MoneyWeek Videos, including:

· The six numbers every investor should know...

· What is GDP?

· Why does Starbucks pay so little tax?

· How capital gains tax works...

· What is money laundering?

[MrOzzy]

You you can spend the money you earn however you like and be taxed on VAT at 20% but if you want to leave it to your family you are taxed at 40% and they will also be taxed VAT when they spend it?

This makes no sense at all.

[TheCuriousSeb]

It still shocks me how greedy the gov is. Their dirty filthy hands are everywhere, even in death.

[johnthompson]

What a brilliant video. Explained so clearly (and some funny moments too!). Just seen this in 2021, 10 years later and with no fancy video editing either. Well done Tim. Really thought provoking.

[johnydubz]

Inheritance tax is such a disgusting concept.

[InstTaxSolutionsLLC]

You're absolutely correct in the inheritance tax is complex. Yet, as is pointed out in this video, it's important to know what are the exemptions to the tax.

[karenmiller]

I discovered that the U.K. and the USA are joint 4th on the list of countries that have inheritance tax, for the highest percent they take - as you said 40%. However, the allowance of £325, 000 is where it kicks in here, but in America it’s $11.4 million dollars.
I’m amazed at the difference. It seriously needs increasing in the U.K. Everyone knows the wealthy avoid this, one way or another, but looking at how much was paid over last full tax year 18/19, an increase of 42%, 5.2 billion, a lot of ordinary working families are getting an awful shock. Is the government behind the massive increase in property prices, so that they benefit from ordinary working families?

[susankazemberyan]

excellent video, you make it easy to understand

[williamkz]

Thanks Tim. Excellent. Update: There is now (I think from 2015 or 2016) relief on property, so if an estate contains a property that's been lived in by the deceased, there's an extra £175, 000 allowance. In theory, and individual could have a nil rate band of £500, 000 and a couple could have a nil rate band of £1 million on an estate containing a residential property, because the surviving spouse can get up to the full nil rate band of the deceased, depending on how much of the nil rate band was used up by the deceased spouse.

[eliopalombi]

Thank you so much for this video, it's the first time ive seen you and i immediately liked and subscribed

[MoneyWeekVideos]

Xerriva - yes they are! HMRC reserve the right to "impute" a market value into any transaction they deem to be on unduly favourable terms. Tim.

[jiggalojaggalo]

you're a really good teacher!! dont stop making these videos!

[Zoobywrites]

Thankyou sir I learned so much from this video very high quality content 🙂

[DownhillAllTheWay]

What happens if I gift my son/daughter practically all my estate, then two years later, I fall ill and need urgent, specialist care, following which I have to go into long-term care. I can't pay for it becaause I gave most of my estate away, so my son/daughter covers the costs, then I die after the money I gifted has been used up, but long before the 7 years is up. Does my son/daughter get clobbered for inheritance tax on the money they spent on me, and never got to enjoy?
As a matter of interest, how does the tax man know about gifted sums? Do they have to be declared, and by whom? The giver or the receiver?

[joneslu]

Thanks for this great explanatory video on inheritance tax!

[joonykids]

Thank you much. You made it all very clear to understand!

[Johnkeav]

Thanks for the clear video. But can I ask please, how do I actually give an estate away? What do ai need to do?

[clarkkent]

Nothing to do with greed, if they didn’t other taxes would have to go up significantly, it is actually quite brilliant. The main problem with it is who gets the house could lose it if they aren’t able to pay the tax.

[shrutkumar]

great information. Thanks
I need to ask one question. Suppose the property is given to Son and daughter as per court agreement legally. Wife is a Trustee. Then how does this Inheritence tax affect son and daughter.

[asidiqbal]

So these gifts are still minus the 40% inheritance tax from the total death estate right? So it is just reduction of the total tax bill

[saimak]

Are Potentially Exempt Transfer cash amounts limitless?