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Inheritance Tax Debt
FanOfSavingMoney
Posts: 1 Newbie
in Cutting tax
If you create debt by Equity Release for example at £20k a year and put this in a tax free ISA. Does this loan qualify as a debt against your estate and reduce your inheritance tax?
0
Comments
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Equity release debt will, in normal cases, reduce the value of your estate for inheritance tax, but the amount in the ISAs will also form part of your estate for inheritance tax purposes. "Tax free" in the context of ISAs is free of income tax and capital gains tax, not inheritance tax.1
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All you are doing is shifting equity in your home into another asset, so no it won’t save your IHT unless you are planning to give it away and keep breathing for another 7 years.0
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