Strategies No. 10: Utilize Business Reliefs
Utilizing allowances that, although you own the asset, the assets are not chargeable for inheritance tax can lead you to a much bigger relief termed as business relief. This relief allows you to make your assets outside of your estate, if you hold them for a couple of years, making your burden free from inheritance tax.
The original purpose of this business relief is to hold trading companies. For instance, if somebody owned a company and they are working in it and they employed staff. If inheritance tax got a charge on the value of that business when the person died, it would cause all sorts of problems.
If there were a few hundred thousand to pay out in tax, then the business would not have the kind of cash flow. The business has to shut a whole bunch of employees to be made redundant. So, it makes no sense to charge inheritance tax from such companies.
The condition over here is to hold the asset of the company for two years. It specifies investing in one major project rather than many versatile different projects. This process can reduce your inheritance tax by reducing your actual income but is risky at the same time. Business reliefs and many other reliefs play an important part in inheritance tax planning.
Combing all the above factors or strategies were different methodologies that help people in not giving a maximum amount in tax. Financial advisors use these strategies frequently and highly recommend them. Who wants to pay money to the government as a tax at the time when they want to secure their future?
Inheritance tax planning in the form of proper will and other aspects can help you to withstand this tough situation and tough time. You can follow these instructions making investments much easier.