Inheritance Tax!

So, Farnham has an average house price of £588,492; nearby Frensham, £1,040,175; Rowledge, £789,884; and Churt, £1,003,334*. While the new Main Residence Nil-Rate Band (NRB) will provide some protection for those with property over £450k (£900k couples), there’s no protection for those with wealth above £2.2 or those without children (lineal descendants).

The Main Residence NRB ‘taper’ this year (2018/19) means that anyone with an estate valued at £2.25 million and above lose the Main Res NRB. This is applicable on the first death, so for couples with a joint estate that exceeds £2.25 million, the taper applies.

Inheritance tax receipts have reached record levels with HMRC collecting over £5bn during the last year, and it’s predicted to increase by a third more in the next 4-5 years. Your hard working (or lucky) clients who have wealth in property, investments (including ISAs) or in their businesses are liable for inheritance tax at 40%

It’s not just the super wealthy in their £ million + homes in the Surrey Hills that are affected. Middle class couples and families in more modest homes, who’ve followed the advice and invested in ISAs, paid into a pension and saved hard, could also potentially pay IHT on their estates.

There are things that can be done. However, many people are either unaware that they have an inheritance tax liability, or don’t have a strategy to reduce this amount. It’s a common problem; in fact 9 in 10 people have no plans to mitigate IHT.

No doubt, you’ve had clients in this position and may have tried to advise them on how to reduce their exposure.

Inheritance tax planning is complicated, especially when clients have a portfolio of different investments and assets. However, there are a host of planning measures that can save a fortune in inheritance tax. From the basics such as getting your will in order, setting up trusts and using gifts; to more complex solutions if your client owns their own company or has a diverse investment portfolio.

Your clients are not the only people that may need some advice for reducing their inheritance tax liability. If you’re a professional (solicitor, accountant, estate agent or financial advisor like myself), own property, have your own business or partnership, and live in this part of the South East, you probably need help too!

Even if you’ve sought advice in the past it may be time to review inheritance issues. Last year’s changes may affect you and your clients, so it’s a good idea to review now and ensure you’ve got the right strategies in place. After all, none of us know when our time’s up!

I’m looking at hosting a seminar later in the year…until then do call us on 0845 8622 789, thanking you in advance….