Here are possible exemptions that an individual can incorporate in inheritance tax planning:
* Annual income tax: £3,000 paid as income tax every year is exempted from inheritance tax. If in a given year, your tax amount is below £3,000, the remaining can be carried over to the next year.
* Give away gifts: Depending on the type and reasons, some gifts are exempted from inheritance tax. Wedding gifts or cash by parents worth £5,000 are not taxable under estate laws. Wedding gift to any individual worth £1,000 is also exempted. Gifts to trusts, political parties and charities are not taxable to a specified limit. Small gifts of up to £250 to anyone you know is acceptable under estate laws.
* Regular gifts from income: You can enjoy tax exemptions on gifts from your income such that it does not affect your lifestyle.
* Farm and heritage property: Farm, woodlands or heritage property owned by individuals is exempted in part from inheritance tax. However, the earning from farm or woodlands is not exempted.
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