The subject of inheritance is a hot topic. The Daniel Craig debate had ‘shaken’ and ‘stirred’ the topic by stating he’ll be spending or giving away most of his fortune, rather than leaving it to his children. It’s an interesting point of view, made a little easier of course if you’re lucky enough to be sitting on an enormous amount of wealth.
While most of us won’t be lucky enough to amass similar sums of money in our lifetime, it doesn’t necessarily mean we’ll avoid the issue of inheritance tax (IHT) if we do feel it’s right to pass our wealth on to our children or grandchildren.
It may seem that IHT impacts relatively few, but in 2021 – 22 HMRC collected 6.1billion from thousands of families. In addition, the current threshold of £325,000 has been frozen until2028– in a move many commentators have described as a stealth tax – with the government predicted to receive £ 6.7 billion in 2022/23*.
IHT is usually levied on the value of all the assets of your estate when you die, after deducting any liabilities, exemptions, and reliefs. Assets left to a spouse or civil partner of the deceased are usually exempt, as are assets left to a charity. However, it is possible to ethically and responsibly reduce or mitigate the impact of IHT with some astute planning, ensuring that more of the wealth you’ve worked so hard to accumulate is passed to the people who you decide deserve it most.
There are a number of things you can do to mitigate what you might be currently on course to pay but here are five things to think about:
Making a plan and adapting it to meet your changing circumstances can help you make sure you don’t miss out on valuable tax allowances. IHT is a complex subject which is why taking expert advice can help you not pay more tax than you need to and ensure your estate goes to those you really want it to.
If you’d like to learn more, please get in touch now.
The value of pensions and investments can fall as well as rise. You may get back less than you invested.
Tax treatment varies according to individual circumstances and is subject to change.
Inheritance Tax Planning & Trusts are not regulated by the Financial Conduct Authority.
*Source – OBR – Inheritance Tax – Latest trends and forecasts March 2022
Approver Quilter Wealth Limited & Quilter Financial Services Limited, Quilter Financial Limited, Quilter Financial Planning Solutions limited & Lighthouse Advisory Services limited. 20/03/2023
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