123ArticleOnline Logo
Welcome to 123ArticleOnline.com!

ALL >> Investing---Finance >> View Article

Land And Inheritance Taxes - The Investor Opportunity

By Author: Chris Westerman
Total Articles: 133

To investors, U.K. land and inheritance tax structures can be a golden opportunity.


Most UK investors in land and other assets wish to minimise the tax burden to their heirs. There are means to accomplish this -- and to realise tax deductions.


Taxes on land investments in the U.K. are unquestionably complex, as much as they are in most parts of the world. Part of the country’s history with real estate includes intentionally attracting outside investments (from non-citizens and non-residents) as a means of furthering investment and development.


The country’s Inheritance Tax (IHT) structure has been in place since 1986, and includes a spousal exemption that hinges on a transferable nil rate band policy. It allows for surviving spouses and civil partners to receive up to 200 percent of the nil rate band, from which they can distribute asset value (or cash) to relatives. The nil rate band is adjusted for inflation, last established for the 2010-2011 tax year at £320,000 and will be reconsidered for increase in April 2015. Up to that amount the tax is 0 percent, while value above it proceeds are taxed at 40 percent.


Following is a collection of how the tax structure affects land investors, starting with rules that apply to inheritances:

For UK residents, taxes apply to inheritances of UK land, as well as property income, gains and transactions of real property. This can include rental income from property, profits, rent and capital gains.

Non-residents of the UK are not subject to a tax on capital gains from UK assets, including land.

“Moveable” (non-land) and “immoveable” (land and mortgages) investments are treated separately under UK inheritance tax statutes. Upon a landowner’s death, where the property is located falls under the rule of lex situs (laws that apply to the location). Even if the deceased had lived in France for ten years, his or her land in the UK is taxed according to UK statutes. Only the moveable assets (e.g., art, jewelry, securities outside of the UK, etc.) are free from UK IHT.

Marriage does not make the spouse an automatic co-owner of the property of the property. Only if the spouse is written into the property title does he or she continue to own it without paying IHT upon the death of the other spouse.

A landowner can give away land, within limits, while still living as long as it is not done to avoid the claims of creditors. All rules regarding IHT transfer taxes apply.

Some applications of real property actually result in tax deductions. For example, gifting of farmland under the provisions of the Agricultural Property Relief can provide tax deductions for the benefactor in the tax year in which the gift is made. Donations of assets including real assets such as land to a UK-registered charity can also provide deductions to the benefactor. Individuals who elect to sell property to a home reversion plan, an Equity release scheme, are allowed to write the income stream proceeds into a trust for beneficiaries by way of a life insurance policy.

Total Views: 70Word Count: 500See All articles From Author

Investing / Finance Articles

1. How Bad Credit Loans Work For Better Financial Solutions In The Uk?
Author: Sara James

2. The Free Forex Robot Minimize Risk And Maximize Profits In The Forex Market
Author: johnsyanol

3. How The Internet Has Made Money Transfer To India Simple?
Author: jack

4. What Are The Major Advantages Of Bill Discounting India?
Author: Marketfinanc

5. Best Home Loan Scheme 04433044488 Documents Required For Home Loan
Author: Loansa Assit

6. Algotrade Can Help You Gain Consistent Returns On Forex Trading
Author: johnsyanol

7. Did You File Itr For Financial Year 2016-17?
Author: Did You File ITR For Financial Year 2016-17? India

8. The Advantages And Disadvantages Of Life Insurance
Author: Sushant ingh

9. Important Aspects Of Banking
Author: Sushant Singh

10. Are You In Need Of Monetary Help For Business Establishment?
Author: John Bairstow

11. Borrowing Commercial Loan Is A Secure Way For Business Owners
Author: John Bairstow

12. The Race To Transform Yourself Into A Profitable Forex Trader
Author: John Arnold

13. House Construction Loan For Bkhata Property Apply 9964563600
Author: House Construction Loan for Bkhata

14. Gst Impact On Mutual Fund Market
Author: Investment

15. Klse Market Understanding Before Investing
Author: Multi management and future solutions

Login To Account
Login Email:
Password:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: