Blog Article

Estate planning deserves some airtime

Estate planning deserves some airtime

Date: 13 April 2023 | By: cosgrove

Following Jeremy Hunt’s decision to freeze Inheritance Tax (IHT) thresholds for a further two years until April 2028, IHT is once again under the spotlight, so estate planning deserves some airtime. Rising house prices and soaring inflation, combined with the extension to the frozen thresholds, mean that more estates are likely to be impacted, not just those of the hugely wealthy. Recent IHT figures detail total HM Revenue and Customs (HMRC) receipts for April 2022 to September 2022 were £3.5bn, £0.4bn  higher than in the same period in 2021.

IHT is a tax payable on all your assets (less eligible debts) when you die and potentially on some gifts you make during your lifetime. If the
estate is liable for IHT, it is usually payable at 40% on the value above a specified threshold.

Threshold refresh
An individual’s current threshold, or nil-rate band, is £325,000. A couple (married or civil partners) has £650,000. Any unused nil-rate
band can be passed to the surviving spouse or civil partner on death. Six years ago, the government introduced an additional nil-rate band
when a residence is passed on death to a direct descendant. The main  residence nil-rate band is £175,000 and when added to the existing
threshold of £325,000 could potentially give an overall allowance for individuals of £500,000.

In order to reduce the amount of IHT payable, many people consider giving assets away during their lifetime. Some gifts will be automatically free from IHT; for example, £3,000 each financial year, certain wedding gifts and gifts to charities.

Don’t tip the balance though
Getting the right balance between gifting money during your lifetime and ensuring you have enough for your future years requires careful planning. Expert planning can legitimately mitigate IHT, meaning you can pass on assets to your family as you’d intended. Estate planning deserves some airtime.

To find out more contact Ian Brown for advice. 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 IHT problems.

You need to plan ahead to ensure that your assets are passed on to your loved ones as efficiently as possible.

Estate planning and Inheritance Tax planning are not regulated by the Financial Conduct Authority.