However, these are topics that affect every single one of us, and issues that will impact every family in the land at some stage of life – regardless of whether you run the country or deliver milk for a living. If you have been fortunate enough to accumulated significant wealth during your lifetime, then there are clearly important decisions to be made.
None of us can take our money with us, but we can at least have some control over how our estates are divided and the tax that is ultimately paid in Inheritance Tax after we die. At the end of the day, we all want to look after our families.
HMRC has just announced a record take of inheritance tax for the last tax year, with £4.6bn due to be collected from the estates of thousands of people who have passed away, a figure that is expected to rise to £5.6bn by 2021, as demonstrated in the chat below.
Estate Planning should be something we all consider, alongside ensuring adequate Pension provisions and writing a Will, and here at The Financial Planning Group, we believe that Inheritance Tax should be considered as a voluntary tax rather than an unavoidable one – by taking advice and undertaking simple but timely planning, we can all reduce or negate completely your inheritance tax.
But worryingly, too many people seem unaware or reluctant to take action, and research shows that rather than being a nation of Inheritance Tax savvy individuals, a whole generation is “collectively sleepwalking into leaving our loved ones with a large and unnecessary tax bill to pay.”
- Just 14 per cent of the people surveyed were aware that the current inheritance tax-free allowance for individuals is only £325,000. If the estate is worth more than this, the remainder will be taxed at 40 per cent.
- Nearly one in three homeowners (29 per cent) aged 70-plus hadn’t considered estate planning or thought about ways to reduce or eliminate the inheritance tax bill they would leave behind for their families.
- Only 8 per cent of those surveyed knew that Isa savings can form part of a person’s taxable estate and therefore could also be subject to inheritance tax.
Wringing in City AM today, Simon Rogerson, Chief Executive of Octopus Investments, comments that; “The majority of families caught in the inheritance tax trap aren’t anywhere near as wealthy as the Camerons. Some could be forced to sell the family home to settle an inheritance tax bill, even with the new £175,000 allowance.”
If would like to discuss your IHT situation, then please call Alan or Tim at The Financial Planning Group on 0800 731 7614 and we can arrange a meeting at our offices in the heart of Teddington.