Thinking about inheritance tax can be daunting. The ins and outs, allowances and exemptions can be complex for such an emotional topic. However, it’s important to ensure your relatives are all set, and seeking financial advice as early as possible is a great way to make sure this happens.
Did you know that £4.84 billion was paid in inheritance tax for 2016/2017? This is an increase of 4%, according to HMRC. This overall figure has almost doubled since 2019, which is when the nil-rate band stopped increasing with inflation.
Currently, inheritance tax is at 40% of the value of an estate over £325,000. If you are married or widowed, this is increased to £650,000.
In April 2017, the residential nil-rate band was put into place, meaning that an extra £100,000 could be added to the tax-free allowance (when leaving your home to children or grandchildren).
This year has seen an increase in inheritance tax being paid already, and with property prices stagnating, this may be due to a crackdown on IHT.
This may mean that people not seeking advice or people not reaping the benefits of tax-free allowances could be caught out.
All of this may seem complicated and feel like a lot to take in. There are, however, many things you can do to reduce the burden of IHT. The earlier this is thought about, the better, meaning you can significantly reduce the effect on your family’s wealth.
If you’re looking for financial advice regarding reducing inheritance tax, inheritance tax rules and how they will affect you and your family, talk to our financial advice team. Please call on 01926 492406 or email us at firstname.lastname@example.org to make an appointment.