Last year the Government received £3.4 billion from inheritance tax receipts and this figure is expected to rise year on year. This is in part due to the fact that the inheritance tax threshold has remained unchanged since 2009.  For many people who have invested in their property, the double-edged sword of increasing house prices means that their estates are now likely to attract inheritance tax when they die.  As part of the run up to the general election, there have already been suggestions of increasing the threshold; however, there is no guarantee that the tax free allowance will rise for some time yet.

Currently, each person can pass on a maximum of £325,000 from their estate tax free.  Lifetime gifts may form part of this.  Where an individual leaves their estate to their spouse or civil partner, the tax free limit which can be passed on from the joint estate doubles to £650,000.  Various reliefs are available for business assets and gifts to charities for example, but in most cases, the chargeable estate above the inheritance tax threshold incurs a tax bill liability of 40%; unless at least 10% of the estate is being left to a registered charity.

Whilst it can be daunting to think about what happens on death and what those left behind have to sort out, it can be a comfort to ensure that they will not be faced with an unexpected inheritance tax bill. Efficient use of exemptions and reliefs during your lifetime can have a significant impact.

*budgetresponsibility.org.uk 

For more information

If you are considering drawing up a will, we can assist you to maximise the potential of your bequests and to protect your estate with confidence.  Please contact our Personal Planning and Management Team on 0121 212 7404 for more information.

Is £400m enough?
Is £400m enough?

The government announced on 16 May that it will provide a fund of £400m to cover the costs of removal and replacement of cladding to high rise residential blocks which have failed tests.

The problems with co-owned properties and attorneys
The problems with co-owned properties and attorneys

Whilst some people are under the impression that preparing a Lasting Power of Attorney (LPA) is simply a case of completing a form and ticking a few boxes, it is about far more than this.

What's mine is (not) yours!
What's mine is (not) yours!

A big fear for some people facing divorce and the inevitable carving up of the matrimonial assets. They seek assurances that such assets will be “ring-fenced” and retained for them.

How to avoid the PET trap
How to avoid the PET trap

When an individual is thinking about making a gift to another individual, consideration needs to be given to the Potentially Exempt Transfer (PET) trap.

Fictitious divorces
Fictitious divorces

Arising from the recent Family Division announcement, people who think they are legally divorced may in fact still be married.