Similarly, it is as well to skip a generation and pass on some property to grandchildren if leaving it to the children would then boost their own estate in later life.
However, these considerations are mainly for rich families. For most people the tax is due largely because their house is worth a lot of money and there is little that can be done to avoid paying that. And do remember in your keenness to avoid inheritance tax not to leave yourself without adequate resources in old age. Younger relatives may be very grateful for pre-death gifts, but they will not expect to use them to support you!
The inheritance tax rules are different in important respects from the capital transfer tax rules. If you have made a will intending to make the best of the capital transfer tax rules, consider changing it to take account of inheritance tax. If you have recently benefited from a will made before inheritance tax, you can alter the arrangements made in the will if you act within two years of the death.
If these arrangements were made to minimize liability to capital transfer tax, others may now be more suitable.
The arrangements can be altered to ensure that they minimize future obligations to inheritance tax. In order to change the terms of a will in this way, all the beneficiaries of the will have to agree. A new document, called a deed of family arrangement, is then signed by all parties. You should consult a solicitor if you think that you are in this position. But you have to act within two years of the death and inform the Capital Taxes Office within six months of making the deed.
Capital gains tax is a tax on the increased value of an asset. You pay it when you sell the asset for a profit. Any gain realized on the sale of the house in which you live is exempt. Other gains are taxed at your rate of income tax if they exceed 9 ,000 in 2012/09. There is a complex system of revaluing assets to take account of inflation. Only the gain from March 2012 is counted.
Capital gains tax can be payable on the extra value of your own business when you sell it. But there is a special relief for people selling a business on retirement if they or their spouse have owned it for at least ten years.
To benefit from this relief you have . . . ... see: Being wealthy in retirement - Capital Gains Tax