News and Views
Why Inheritance Tax is a voluntary tax

It is a fact of life given the recent sharp rise in the value of property that many more people than has previously been the case will fall due to pay Inheritance Tax (IHT) on their deaths. Inheritance tax is currently payable at 40% on the value of your estate over £255,000.

Your estate will include all property, cash, investment and the death benefit of pension or life policies unless they have been written in trust. What many people are not aware of is the double whammy that occurs when a spouse leaves all of his/her estate to the surviving spouse. Whilst the transfer on the first death will be exempt from IHT because it is a transfer to a surviving spouse, on the second spouses death the total combined estate becomes chargeable which could result in a large IHT liability depriving the beneficiaries of a large chunk of their inheritance.

However simple and timely planning can avoid or reduce the Inheritance Tax charge. An integral part of the planning is to ensure that sufficient income is retained to ensure that you will never be left with inadequate funds.

To discuss Inheritance Tax planning please contact Chris Wright. Remember the key to IHT planning is to act sooner rather than later.