I recently saw an article in ‘International Adviser’ (I should get out more, I know!) about how many people are unaware of the Inheritance Tax (IHT) rules.
Just 7% of clients seeking advice believe they have any potential IHT liability, according to research by Prudential.
Properties in this area are priced a lot lower compared to other parts of the UK and whilst 7% is probably a reasonable proportion for ‘down South’, it’s less rare ‘up Furness way’. That said, we do advise many clients whose assets exceed the limits of £325,000 each, plus up to £150,000 for their house.
That allowance is limited to the house value, if it is less than £150,000 then you must leave it to descendants to qualify (that’s a basic summary). There are ways to lose the extra ‘house allowance’ if you are not careful. You need to make sure you maximise your allowances, which we can go through with you, tailored to your own circumstances.
As the article suggests, we take a ‘generational’ approach to inheritance. Death should not be the starting point. Estate planning should work to protect your assets within your lifetime, on your death and then for your family beyond that. Trust planning can protect assets in your lifetime but the rules on lifetime gifts and IHT can conflict.
Talk to us now to get your planning right for you and your family’s future. Why work hard to see what you’ve earned go to the taxman?