Inheritance Tax is back on the agenda

With rising asset values and frozen allowances, once again Inheritance Tax (IHT) is on the agenda and momentum is building.

To recap, in 2008 the transferable Nil Rate Band was introduced and then in 2017 the Residence Nil Rate Band came into play. These changes removed the potential liability (temporarily) for a lot of households, but events have moved on and once again IHT is a real threat to middle Britain.

The average IHT bill has climbed to more than £200,000 according to the latest government figures and the tax take reached £5.4 billion in 2020/21 up £190 million on the previous year.

£5.4 billion IHT     

IHT has been historically associated with the wealthiest in society but this is no longer the case. With over 30% more people being caught out with IHT last year, figures show middle-class families are now being hit with hefty tax bills.

Booming house prices, rising asset values and frozen allowances are all aligning themselves to create a perfect storm that will increase the IHT take. Recent figures show nearly a third of over 50s have never checked how IHT could actually affect them despite 30% believing their estates were worth more than the current tax-free allowances.

Within future newsletters we will focus our attention on IHT, which we view as a voluntary tax, and we will share with you real client stories and give you tips for intergenerational planning.

If you are concerned about the possible impact of IHT on you and your family do not hesitate to contact your Innes Reid adviser to get a better understanding of how your estate is positioned and what IHT planning opportunities exist.

Alternatively, if you are new to Innes Reid and would like financial advice that’s personal to you, please request a free, no obligation meeting. Email: info@innesreid.co.uk or call: 01244 347583.

 

This article is not personal advice.
Source: Telegraph Money, Office for Budget Responsibility.

 

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