The situation with regards to Inheritance Tax and wills has undergone some changes following the Pre-budget Report of the 9th of October, 2007. This article is intended to provide you an accurate overview of the changes that have been implemented.
The state of affairs prior to the 9 October, the basic inheritance tax situation for civil partners prior to the month of October 2007 was quite simple. The threshold for inheritance tax was PS325,000 and the remainder was likely to be taxed at 40 percent. You can also know more about legacy tax planning online.
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If the first spouse passed away and the property was left to the survivor upon the first death there would not be any inheritance tax because of the spouse exemption. However, in this scenario, there was a chance that the non-rate band for the first person to die was not fully utilized.
Since the survivor owned all of the assets, there was a bunching effect, which resulted in the fact that, upon their death, there would be a large inheritance tax charge as they only had their own threshold for Inheritance Tax to put against the bunched estates.
The scenario after 9th October. In the case of second deaths that occur following the 9th October 2007, the tax implications of inheritance taxes arising from the "bunching" of estates during the time of death may be reduced through the Executors of the survivor's estate by submitting a 'transfer claim' with the Tax Office.