Soaring house prices coupled with the main inheritance tax thresholds being frozen until 2025/26 have the potential to drag more estates into the inheritance tax net over the coming years.
According to the The Times there were 563,240 homes in Britain worth more than £1m in June 2021 and the average house price was £250,000.
Inheritance tax is usually charged at 40% on the value of your estate (property, money and possessions) over the 325,000 nil-rate band. There is an additional allowance of £175,000 if you pass on your home to children on grandchildren.
If you are married, you can combine your thresholds and transfer assets between each other tax free. A surviving spouse can inherit without any tax liability and utilise unused thresholds on your death.
Most people should think seriously about taking steps now to protect their estates and ensure that as much of their wealth passes onto their beneficiaries as possible.
This Active Practice Update provides detail on the following key elements involved in taking charge of planning your estate:
- Making a Will
- Putting Assets into Trust
- Gifting Assets over time
- Using the Pensions Allowance
If you would like to discuss planning your estate with a member of our team, please call 01772 741200