If you’ve invested in buy-to-let, you’ve probably done so with the intention of creating a steady income for yourself, together with capital to pass on to the next generation when you’re gone. But unfortunately, wealth tied up in residential lettings often comes with a significant inheritance tax burden. The stamp duty crackdown on buying property investments and the income tax raid on rent (section 24) has made investing in property less attractive than it once was.
You will have great difficulty passing these investment property assets to your children without leaving them with a massive inheritance tax problem. This IHT bill has to be paid within 6 months, and has to be paid before any of the properties are sold. There are several steps you can take to reduce your IHT liabilities, or perhaps even eradicate the liability entirely.
