Record Inheritance Tax Receipts a Sign That Not Enough People are Protecting Themselves
The recent news that a record high figure in excess of £5 billion was gathered by HMRC in inheritance tax during the most recent tax year is a timely reminder to bring up the subject of estate planning.
The record high figure, according to the Office for National Statistics (ONS), for 2016/17 of £5.1 billion, shows just what a vast amount the Government makes from this source of tax.
Whilst experts in estate planning such as ourselves at Pindoria Solicitors understand that average property prices have been rising around the UK, particularly in southern England, meaning a naturally higher figure, there is more behind the passing of the £5 billion barrier.
Property assets in excess of £325,000 are subject to inheritance tax as they are passed on to inheritors, with that figure having remained unchanged since 2010.
Also, it is the case that the freezing of the threshold for inheritance tax liability at £350,000 for the past few years has also had an impact.
Of course, no more so than here in London where property values have risen consistently over the course of recent years and the result has been a rise in the number of people who find themselves facing inheritance tax bills.
It’s worthy of note that estimates from the Office for Budget Responsibility believe that the number of family estates affected by inheritance tax increased almost 400 per cent between 2010 and 2017.
Stamp duty also has played a part, with the relatively large sums currently being taken as duty during the process of a property purchase deterring a sizeable number of people later in life from downsizing to smaller and less valuable homes.
Of course, this means elderly people who don’t downsize may pay more in inheritance tax as more of their capital will be tied up in their property, leaving them with less to give away.
Current rules mean that estates worth £350,000 or less can be passed to inheritors without taxation, with any value above that figure being taxed at a rate of 40 per cent.
This story, we hope, will flag up to many the importance ofestate planning, especially here in London and the South East, where prices are considerably more expensive compared to practically everywhere else in the UK.
Good estate planning is paramount to protecting wealth and at Pindoria Solicitors we help many families save huge figures each year through our legal expertise in this area.
We hope, for the sake of many families, more people will take the time to carefully plan what is to be done with their lifetime’s assets. It is a huge matter, which affects people greatly and great peace of mind can be gained from taking action now.
If you wish to know more about inheritance tax or estate planning we at Pindoria Solicitors are happy to help. Please call us today.