Inheritance assets protected by joint ownership?

Individuals with a substantial inheritance may fear they will be subject to high levels of tax, as one reader recently questioned a newspaper about the duties payable on property left in a will.

The Daily Mail reveals while inheritance tax is docked when the assets are transferred to the benefactor, capital gains tax may still be owed on real estate.

A levy will be due when the residence is sold, with the sum worked out from the difference between the value at the time of probate and that which it holds when it changes hands.

However, joint ownership could mitigate the amount Britons are liable for, as everyone is entitled to an annual capital gains tax allowance of £10,000, after which fees are paid at a rate of either 18 per cent or 24 per cent, depending on other sources of income.

Advice from the Institute of Financial Planning recently highlighted the importance of making a will and ensuring it is kept up to date, a move that might allow for inheritance tax planning.

Published by Phil Hammond