Any Credit HistoryMarket Leading Rate 0.55%1st & 2nd ChargeAuction FinanceResidentialCommercialRefurbishmentQuick DecisionExpert AdviceNo monthly paymentsInheritance tax has the potential to make life's most challenging times even more unsettling. As most people are not familiar with the inheritance tax legislation, it often comes as an unwelcome surprise at the worst possible time.
Inheritance tax is a form of tax payable on the estate of a deceased individual when it is passed on to one or more beneficiaries. From properties to personal possessions to savings, almost everything inherited from a deceased individual is considered taxable by HMRC.
The current inheritance tax threshold is 325,000 GBP. This means that an estate inherited with a total value less than this is not liable for inheritance tax. After which, the standard 40% inheritance tax rate applies to the value of the state above this amount. Example: Your estate is worth 500,000 GBP and your tax-free threshold is 325,000 GBP; therefore, the inheritance tax charged will be 40% of 175,000 GBP (which is the taxable amount after your tax-free threshold).
If you are considering taking out a bridging loan to pay an inheritance tax bill, call bridgingfinance.com for an obligation-free quotation. Alternatively, email us with the details of your request, and we will get back to you as promptly as possible.
Bridging loans can be used for a variety of purposes, with the following being the most common:
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The subject of inheritance tax can quickly become complicated as there are options to explore for reducing the amount of tax you have to pay, perhaps to zero. For example, if a deceased individual leaves their home to their children (including adopted, foster, or stepchildren) or grandchildren, the threshold can increase to 500,000 GBP. In addition, if a married person or civil partner has an estate that is worth less than the applicable threshold, any unused threshold can be added to their partner's threshold when they die. For others, inheritance tax can be payable at a reduced rate of 36% on some assets upon leaving 10% or more of the 'net value' to a charity in their will. (The net value is the estate's total value minus any debts.)
The issue with inheritance tax obligations is that not only are they significant in nature, but they are also quite urgent. Upon inheriting assets of any kind following the death of a friend or family member, you have just six months to make the inheritance tax payment in full. In the meantime, you will not be granted probate (access to the assets of the estate) until you have settled your tax debt. This often presents a catch-22 situation, as it can be difficult to sell the assets you have inherited to meet your tax obligations, and you are unlikely to have the on-hand cash needed to pay HMRC. Charged at a rate as low as 0.5% per month, bridging finance can be extremely affordable when repaid promptly.
A bridging loan provides you with prompt access to the funds needed to pay your inheritance tax bill. Bridging loans can be secured against most types of residential and commercial properties, with a maximum LTV available of around 80%. You could therefore use the home you live in as security for a bridging loan, enabling you to settle your inheritance tax bill within a matter of days and gain full legal ownership of your inherited assets.
It is unlikely you will be able to secure a loan against the assets you have inherited, as they are not technically your property until you have settled your inheritance tax bill. You will therefore need to provide a different form of security, such as the home you live in or a commercial property you own. Some bridging loans can be secured against other assets of value, including business equipment, vehicles, jewellery, and watches.
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