Concerned about IHT?
With both the Inheritance Tax (IHT) nil-rate band and residence nil-rate band remaining frozen at
existing levels until April 2026, at £325,000 and £175,000 respectively, many families are concerned about IHT and receiving hefty IHT bills.
The increase in receipts has been attributed to the big freeze in allowances, rising estate values and the sad increase in deaths among those over 60 due to the pandemic.
If you’re concerned about IHT, here are a few things to think about…
– Gifts – remember to use your £3,000 annual allowance. You can also make gifts of up to £250 per
person, to as many people as you want in each tax year; make monetary wedding gifts; donate to
charities and political parties, and make gifts from surplus income that don’t affect your standard of living;
– Use trusts – for example putting money into a trust to pay for a grandchild’s education or to provide
support for a relative
– Make a Will – and keep it up to date
– Leave money to charity – if you leave at least 10% of your net estate to charity, the IHT rate is reduced from 40% to 36%
– Take out life assurance – this won’t reduce your estate but instead provides a lump sum to
your beneficiaries to pay the bill. The policy should be written under a suitable trust
– Take professional advice – sensible IHT tax planning can help to reduce the amount of IHT your beneficiaries will have to pay and safeguard your wealth for the future.
If you are concerned about IHT please get in touch and we can discuss all of the above options.
We can also help you with making a suitable will. It pays to understand the value of your estate and we would be happy to help you go through a checklist which will give you an indication of any likely, future IHT problems.
You need to plan ahead to ensure that your assets are passed on to your loved ones as efficiently as possible.