The decease of a family member or close friend is often very complicated. It can be made worse by the hesitation involved in cataloging out the deceased’s monetary associations. Executors have tasks to be exercised correctly and beneficiaries have expectations to be managed sensitively. The work needed will vary according to whether the deceased left a will or not and in either case family tax planning may be required to manage assets for existing beneficiaries and future generations so those assets are protected and maximized wherever possible. A death may trigger inheritance tax, capital gains tax and income tax issues and the self-assessment regime overseen by the Inland Revenue makes it vital that these issues are anticipated and dealt with efficiently to avoid penalties and interest being incurred. These tax issues are mainly relevant if the estate contains agricultural land or business property or there are heritage considerations affecting the deceased’s personal effects.
When a person dies, the property that he or she leaves for others may be issue to tax. An estate tax is a tax on the deceased person’s estate, which includes everything the person owned at the time of death—money, real estate, stock, bonds, proceeds from insurance policies, and material possessions. Most governments levy estate taxes before the deceased person’s property passes to heirs, although many governments do not impose an estate tax on property inherited by a spouse. An inheritance tax also taxes the value of the deceased person’s estate, but after the estate passes to heirs. The inheritors pay the tax. Estate and inheritance taxes are sometimes collectively called death taxes. A gift tax is a tax on the transfer of property between living people. (Atherton, Pamela (2005)
When a person dies, the common law is that all property that was owned by the decedent (the dead person) is included in his estate at the worth of that property on the date of death.............
