Mom in High Heels Posted December 8, 2013 Share Posted December 8, 2013 How do death duties (taxes) work in the UK? I'm genuinely curious. Quote Link to comment Share on other sites More sharing options...
Melissa in Australia Posted December 8, 2013 Share Posted December 8, 2013 bump Quote Link to comment Share on other sites More sharing options...
horsellian Posted December 8, 2013 Share Posted December 8, 2013 I'm no expert, but I think Inheritance Tax works like this: there's a tax allowance of £325k, and then it's 40% of everything in the estate above that. The allowance is transferable between spouses too, I think. I've just found the official explanations on the HMRC website, which should give you everything you want to know and more! http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm Quote Link to comment Share on other sites More sharing options...
Mom in High Heels Posted December 8, 2013 Author Share Posted December 8, 2013 I'm no expert, but I think Inheritance Tax works like this: there's a tax allowance of £325k, and then it's 40% of everything in the estate above that. The allowance is transferable between spouses too, I think. I've just found the official explanations on the HMRC website, which should give you everything you want to know and more! http://www.hmrc.gov.uk/inheritancetax/intro/basics.htm Thank you. I was curious, because I've been watching Downton Abbey and they are discussing selling land to pay it. When we were in Germany, I'd see commercials about getting help paying death duties. I can't imagine anyone who has an estate valued over £325k would need help from a company that advertises on TV though. :) Quote Link to comment Share on other sites More sharing options...
StephanieF Posted December 8, 2013 Share Posted December 8, 2013 A problem can arise if you have illiquid assets over the limit, what if you can't sell them quickly enough to raise the tax payment? Stephanie Quote Link to comment Share on other sites More sharing options...
Laura Corin Posted December 8, 2013 Share Posted December 8, 2013 Thank you. I was curious, because I've been watching Downton Abbey and they are discussing selling land to pay it. When we were in Germany, I'd see commercials about getting help paying death duties. I can't imagine anyone who has an estate valued over £325k would need help from a company that advertises on TV though. :) Death duty percentages have varied. At some points in the 20th century, they were much higher. Often landed families had relatively little cash, so had to sell up (or donate items/land to charitable institutions) to pay the duties. L Quote Link to comment Share on other sites More sharing options...
horsellian Posted December 8, 2013 Share Posted December 8, 2013 I can't imagine anyone who has an estate valued over £325k would need help from a company that advertises on TV though. :) Well in parts of South-East England even a fairly modest house will be worth that, and in London prices are even higher. Many people are only liable for inheritance tax because of the value of their homes - I think it's the reason that the allowance was made transferrable, because of people who were unable to afford inheritance tax when their spouse died without selling their home. Quote Link to comment Share on other sites More sharing options...
Mom in High Heels Posted December 8, 2013 Author Share Posted December 8, 2013 Well in parts of South-East England even a fairly modest house will be worth that, and in London prices are even higher. Many people are only liable for inheritance tax because of the value of their homes - I think it's the reason that the allowance was made transferrable, because of people who were unable to afford inheritance tax when their spouse died without selling their home. I forgot about real estate prices. They are crazy in the UK! The into posted though said that married couples have an allowance of up to £500k, so wouldn't the exempt a lot of people? Of course, I know there are a lot of domestic partners who aren't married. On the home improvement/yard shows I watched, I swear no one was ever married. BTW, I loved Changing Rooms, especially when Lawrence was on it. He was kooky. Is there an exception for domestic partners if they've been together a certain amount of time? Of course, how would they prove it? Quote Link to comment Share on other sites More sharing options...
Laura Corin Posted December 8, 2013 Share Posted December 8, 2013 I forgot about real estate prices. They are crazy in the UK! The into posted though said that married couples have an allowance of up to £500k, so wouldn't the exempt a lot of people? Of course, I know there are a lot of domestic partners who aren't married. On the home improvement/yard shows I watched, I swear no one was ever married. BTW, I loved Changing Rooms, especially when Lawrence was on it. He was kooky. Is there an exception for domestic partners if they've been together a certain amount of time? Of course, how would they prove it? No, you have to be married or civil partnered, at least in England. Scotland has the concept of 'common law marriage', but England/Wales don't. I don't know about N. Ireland. L Quote Link to comment Share on other sites More sharing options...
Mom in High Heels Posted December 9, 2013 Author Share Posted December 9, 2013 No, you have to be married or civil partnered, at least in England. Scotland has the concept of 'common law marriage', but England/Wales don't. I don't know about N. Ireland. L What's 'civil' partnered? So do Scots who have a common law marriage get the same tax rate for death duties? How long do they have to be together to be considered common law? Quote Link to comment Share on other sites More sharing options...
Laura Corin Posted December 9, 2013 Share Posted December 9, 2013 Civil partnership is the legal equivalent of marriage for same-sex partnership. Same-sex couples are likely to be able to actually marry in the near future, but civil partnership offers the same legal protection. It was a political fudge. I'm wrong about common-law marriage in Scotland: it seems to have been abolished as a concept. The paragraph 'irregular marriage' on this page covers it. L Quote Link to comment Share on other sites More sharing options...
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