20 May 2013

Don't Forget Inheritance Tax

The amount of tax income the government received from Inheritance Tax increased in 2011/12 to £2.91 billion, up from £2.72 billion in 2010/11 apparently.
The most likely reason is the freezing of the allowance - the nil rate band - at £325,000. That's now frozen until 2017/18. The implication for all of us is that more and more people will be brought into the IHT net. In fact, the number of estates which were subject to IHT in that year was up by 3,000 to 20,000. Overall that doesn't sound like a lot, but given the prices of property - the largest part of most estates - my guess is that most of those will be in the south east of the country.
There are a number of tried and tested techniques for reducing an IHT liability, although it does need careful consideration of someone's objectives - preserving access to capital to fund care costs is a  big thing for many people, for example.

This is one area where professional advice costing three or four figures could make a five or six-figure difference in a family's wealth!

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