Inheritance Tax Planning

A tax more and more families are finding themselves having to pay. The rate of Inheritance Tax (IHT) is 40% on any amount over the tax free allowance of £325,000. The allowance is a personal one so married couples and civil partners can effectively avoid tax if their estate is less than a combined £650,000. However, this allowance has been frozen for some years now. Consequently more estates are being caught in this tax trap. 

The election of a Labour government in July 2024 has given rise to speculation that IHT may be about to get more severe. The Labour party has committed to not raising Income Tax, National Insurance, VAT and Corporation Tax. These taxes account for some 75% of all tax revenues and the government has left itself little room for manoeuvre so taxes such as IHT and Capital Gains Tax could be prime targets to raise revenue. More on this will be known after the budget expected in October 2024. Please visit our site which will have full details. UPDATE read our article on IHT and other measures announced in the 2024 budget here.

Inheritance tax can be complicated and the mitigation methods available even more so, but a great deal can be done to reduce or even eliminate IHT by judicious use of allowances, excemptions and careful planning.

If you would like to establish your potential IHT liability and discover how you can mitigate it or if you wish to review existing plans please contact us on 07590 828227 or e.mail ken@mcneilstevens.com