A Bridging Loan Calculator To Assist with Estate Tax Planning

A loss in the family might well leave immediate relatives and next of kin in possession of a significant account for inheritance tax as a result of a large estate. The inheritance tax demand can be normally resolved by sale of the property. However if grant of probate should not be available within a reasonable time limit then sale of the deceased property can not proceed. As probate renders the executor the right to sell.

A bridging loancan be utilised in many probate situations with the aforementioned situation in mind. In order to settle the inheritance tax onus of an estate a probate loan, as an alternative term to a bridging loan, can be used. Following this the estate property can then be put up for sale. A bridging loan may also appease the added stress of perhaps paying the estate tax account in instalments.

By securing bridging loan facilities on a different or existing premises the tax bill can be settled. The retained, or rolled up interest as it is often called, may be used to offset any monthly premiums. Once the residence is realised the bridging loan finance can then be concluded. All estates and legacies that include assets over £325k have a likely tax liability. The Chancellor of The Excheqeur will maintain the estate tax limit (the level at which you’ll need to pay inheritance tax) at £325k until 2014. The estate tax payable over the nil rate band is currently 40 percent.

The laws that govern and dictate estate tax (Inheritance Tax Act 1984) are very perplexing and may well appear daunting to the layman, the executor's are required to settle estate tax due to HMRC (The Inland Revenue) within six months after date of death. Frequently for most individuals, the most important and essential aspects of Inheritance Tax concern mitigating the tax due to a minimum and to ensure it is disclosed to the Inland Revenue. Further to settling any estate tax due and payable in the prescribed time constraints.

Besides the constraints exacted on determining inheritance tax and whether or not there is a need for bridging loan funding to fulfil the estate's demands. What can also compound the issue is how complicated the estate is. This can involve deposits with the bank or building society as well as any current accounts, the deceased residential estate coupled with contents. Any stocks held along with privately operated businesses (irrespective of their trading status), the shares held and whether any tax relief is claimable. Also to consider is any disbursements in the seven years that preceded death such as care and maintenance of the deceased. Any gifts and whether any land owned was agricultural or business or no more than private.

Unequivocal requests for modest amounts of itemised chattels and money may well be dealt with immediately on grant of probate. In relation to distribution and disposal of the estate in it's entirety, the executor is not barred. This also takes in inclusion of residue. However it is encouraged that any distribution of the aforesaid is left until such time as all issues and inheritancetax with HMRC have been discharged.