The wealthy or the rich have many ways to avoid paying the tax on their wealth. There are several tax evasion tricks that they use and a lot of them are quite effective. In this article, we will review some of them so you know how to avoid facing inheritance tax in the UK.
What is the Inheritance Tax
In a country with a progressive income tax, the rich avoid inheritance tax. The wealthy will transfer the assets of their children to the poor before they die so that there is no tax burden on them. This allows the children to inherit more because there is less to share between them and their siblings. This tactic can also be used by individuals to reduce their taxable estate when they have already reached a certain point of wealth. It is levied at the rate of 35% on the amount above which $2,000,000 is exempt for persons who have not paid any income tax for five years or more.
How do the Rich Avoid Inheritance Tax in the UK?
There are many ways that the rich avoid inheritance tax in the UK. The most popular way is to transfer a large amount of money into an offshore fund. This entails an individual or corporation creating a private company, purchasing shares in it, and then transferring their entire fortune into the said company via share capital. There are other methods of avoiding inheritance tax as well, but none of them are as effective or as widespread as this popular method.
How can I avoid inheritance tax when I die
There are many ways to avoid inheritance tax, which is the taxation on assets passed down to heirs after someone dies. One way to do this is to have your children inherit your property in their name instead of yours. This will allow you to transfer your property into a trust before you die and avoid paying inheritance tax. Another way to avoid inheritance tax is by transferring property into a living trust while alive. This must be done as soon as possible if you don’t want to pay taxes in the future.
Conclusion
The idea of inheritance tax is that the family who has accumulated wealth will give it to their children and grandchildren, but those children and grandchildren should be taxed for the money that they received. The rich often use various methods to avoid this tax. For example, they might set up a trust before they die so that their estate is given to their children or grandchildren without them paying any inheritance tax on the money.
