that Inheritance Tax can be 80% and not the usual 40%
Yes it’s true. Inheritance Tax is bad enough at 40% but it can be even 80%.
Say we have middle aged clients with an inheritance tax liability. The wife has an elderly mother who herself has an inheritance tax liability. The mother then dies and the inheritance tax is paid at 40% on her estate. That estate is inherited by the daughter who then dies before the inheritance is spent and her estate is also taxed at 40%. That’s a total of 80% on the same assets!
This is not uncommon but it is easily avoided. At McClure we would set up a Family Protection Trust for the mother and protect her estate in her Trust. When she dies the daughter has in effect full access to the mother’s estate but that estate is not part of the daughter’s estate on her death. So with a bit of timely planning we can avoid the 80% inheritance tax bill.
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