How to pay 0% inheritance tax

@maseonomic_

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The video provides valuable, actionable financial advice on a topic that affects many people, presented in a clear, step-by-step format with easily digestible information.

Summary

The video outlines five steps to potentially pay 0% inheritance tax. These include making tax-free gifts, giving unlimited amounts to children after seven years, leaving assets to a spouse, utilizing the combined allowance for married couples, and making unlimited income gifts that don't require surviving seven years.

Structure

1Introduce 5 steps to pay 0% inheritance tax
2Explain £3,000 tax-free gifts and carry-forward allowance
3Discuss unlimited gifts to children after 7 years
4Cover spouse exemption and combined allowances for couples
5Explain unlimited income gifts as a tax-free option

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On-screen text

How to pay 0% inheritance tax in 5 steps 1 2 3 4 5 £3,000 tax-free gifts Give unlimited amounts Spouse = 0% IHT Pass on up to £1m Unlimited income gifts

Original caption

Most people know about the 7-year rule. Far fewer know there are several other completely legal ways to reduce or even avoid inheritance tax. This is general information only and not financial or tax advice. Rules depend on individual circumstances, so consider speaking to a qualified professional.

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Transcript

Number one, you can give away £3,000 tax-free gifts every tax year, completely exempt from inheritance tax. And if you didn't use last year's allowance, you can carry it forward once, meaning you could give away £6,000. Number two, you can give away unlimited amounts of money while you're alive, survive for seven years after making the gift, and there's normally no inheritance tax to pay. Which is why I think it makes far more sense to give money to your children while you're still here to see them benefit from it. Number three, anything you leave to your spouse or civil partner is generally completely exempt from inheritance tax, a huge benefit of marriage in the UK. Number four, a married couple can potentially pass on up to £1 million without paying a penny of tax. Your standard £325k allowance can potentially increase to £500k when you leave a qualifying your grandchildren and unused allowances can transfer between spouses, potentially doubling that to £1 million. And finally, number five is anyone if you regularly earn more than you spend, you can potentially give away unlimited income gifts, completely free of inheritance tax. Unlike normal gifts, you don't have to survive seven years. It needs to come from your income rather than capital, form part of your normal spending and still leave you enough to maintain your usual living.