Hello, my name is Ann Dudzinski and I am one of the solicitors in the Wills and Probate Department here at Blacks. Inheritance tax isn’t a jolly subject nor an easy one! But it can be well worth finding out about how it works, and seeing if it is possible to reduce the amount of tax to be paid.
For Park Site Owners in particular, inheritance tax isn’t straightforward, so I set out below a brief overview of the inheritance tax regime:
1. The first £325,000 that someone leaves is not taxed but if their estate is worth more than £325,000, inheritance tax is likely to be payable.
The word ‘estate’, in this context, means everything the deceased owns at the date of their death – and it can also include the value of anything that they have given away in the seven years before the date of their death.
2. The rate of inheritance tax is 40% and this applies to everything over and above the first £325,000.
So for example if someone leaves an estate valued at £500,000 the tax would be £70,000. This is calculated as follows:
a) £500,000 – £325,000 = £175,000
b) £175,000 x 40% = £70,000.
3. Having said that, there are some exemptions from inheritance tax – any money or property that someone leaves to their spouse or civil partner, is exempt from inheritance tax, for instance, and so is anything left to charity.
4. For park site owners, one of the most important things to think about is ‘business relief’. In many cases, the value of a business is zero rated for inheritance tax, and this zero rating is called ‘business relief’. You will not be surprised to learn that there are conditions attached to this and the conditions which park sites have to meet are particularly complicated.
Many different factors are taken into consideration when considering tax exemptions, including the length of ownership of the site, the type of site, the facilities it offers and which aspects of the business make the most profit.
The specialist Holiday and Home Parks Department at Blacks can advise you about inheritance tax, and also about lots of other legal matters relating to park ownership.
I’d be pleased to arrange a meeting to discuss inheritance tax –I usually do this in the context of making a will for someone, and I would be happy to look at an existing will and see if it needs bringing up to date, or to make a new will for you if you don’t already have one. I look forward to hearing from you.
Wills and Probate Department
0113 2279 235