£4.7 Billion in Inhertiance Tax Paid by UK Home Owners in the Last Twelve Months
Inheritance tax payments are rising fast. Last year UK home onwers paid out £4.7bn in inheritance tax payments, a 22% increase on the year before and the highest on record. Most of the tax was due to the rise in property values, and as such, people living in London and the South East were most affected. As property prices continue to rise in this region, so inheritance tax will rise too. The figures were provided by the Office of National Statistics. (ONS).
How Inheritance Tax Works
Inheritance tax is paid when an individual passes on assets greater than £325,000. A couple, can pass on £650,000 before inheritance tax becomes a factor. Once it does, anything above these figures is taxed at 40%.
The threshold hasn’t shifted since 2009 and rising house prices have led to more and more of us paying the tax. Proposed changes have received criticsm from some quarters as being too complex.
An ONS spokesman said:
“Each year, residential property makes up approximately a third of the total value of taxpaying estates and the ongoing rise in property prices has contributed to a rise in overall tax take.
“At the same time, as the average value of estates rises, an increasing number of estates will now be valued over the IHT threshold (or nil rate band), which has been frozen at £325,000 since April 2009. An increasing number of estates could, therefore, potentially be liable for IHT.”
As you can imagine property is the main driver for most IHT demands. Although property values have risen consistantly for decades the IHT has remained unmoved. Although George Osborne announced in his 2015 budget that main residense allowance would increase to £175,000 by 2017, IHT will still be a factor you will have to take into account. Like many recent government policies, the announcement was met with confusion.
In my experience as an award winning financial planner, making provisions for IHT in the early stages is prudent. Here you can use financial vehicles to move a property out of the clutches of taxman, together with your other assets.
Don’t be Caught out by Inheritence Tax
To mnimise your IHT liabilities contact me in the first instance. Together we can look at your assets and decide the best finanical vehciles to address the IHT issue, and keep your inherritance with your family for many years to come. Complete the CALL BACK SERVICE form in the first instance and keep your money in your family where it belongs.
Source: Daily Mail