Inheritance tax charges – are you affected?

Although it is commonly perceived that only the wealthy are affected by inheritance tax, more of this tax was paid in 2015-16 than in previous years, leaving an increasing number of UK families looking for advice.

In August this year, FTAdviser.com cited an Office for Budget Responsibility study noting that the number of people paying inheritance tax has increased by 160% during the last six years.

The data indicated that an average of 109 families per day face the payment of inheritance tax before they can have access to the estate of the deceased. At an already stressful time, these families have up to six months to pay the bill, or they will be charged interest on top.

During 2015-16, £4.7bn was collected by HMRC, representing the highest amount ever taken in one year. A forecast provided by HM Treasury states that the inheritance tax collected will increase further over the coming five years.

Experts advise people to obtain independent financial advice so that they minimise tax charged on their estate. In a recent Daily Telegraph article, the head of Skipton Building Society’s technical services, Mark Butterworth, stated that many people would be surprised by the actual value of their assets, including property, cars, savings and even jewellery or antiques.

In addition to making sure you have a will in place, you should also consider estate management, especially if you believe you may be in danger of exceeding the current inheritance tax allowance.

Wirral families looking for sound and impartial advice on inheritance tax can speak to our team here at Endeavour Financial Planning for friendly, expert guidance.

Estate Planning and Inheritance Tax Planning advice are not regulated by the Financial Conduct Authority.

Sources used: https://www.ftadviser.com/2016/08/02/ifa-industry/tax-planning/ways-to-mitigate-inheritance-tax-hbRKN0ilYsQGy29NKz257M/article.html
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/541725/IHTNationalStatisticsCommentary.pdf
http://www.telegraph.co.uk/financial-services/investments/inheritance-tax/why-109-families-a-day-are-paying-inheritance-tax-by-making-sens/