One of the property taxes in Britain is the Inheritance Tax. This tax is paid according to the current market value of the estate in the event of its owner’s death. It is paid by the individual who inherited the property. Moreover, this tax is also applied on gifts and trusts created during the life of the owner.
Avoiding Inheritance Tax
When creating a trust, it is highly advisable to place a small amount of asset for starters and gradually add assets as time goes by.
Determine the trustees. Trustees are people who will determine the distribution of your assets to the beneficiaries. Take note that you can assign yourself as a trustee as long as you will also assign an independent trustee; this trustee must be outside of your nuclear or immediate family.
Determine the beneficiaries of your trust. It is important to note that family trusts should only be given to your immediate or extended family. Also, your beneficiaries will not have the right to compel your trust distribution. As a matter of fact, the trustees have the authority or the right to distribute the assets as long as they act reasonably and in the best interests of all the beneficiaries.
Hire a trust lawyer that will draft the trust’s deed. The deed will contain the list of assets, trustees, and beneficiaries; the rights and duties of the trustees; regulation of the assets; and the rules for asset management. This document will be signed by the trust owner and notarized by the lawyer.
Gradually sell assets to your family trust and pardon the trust’s debts through legal documents.
Lease the trust asset’s and pay the lease fee. This will give you the right to use the real estate property that you placed in the trust, while increasing the amount in the trust at the same time.