[vc_row][vc_column][vc_column_text]According to figures from HM Revenues and Customs, inheritance tax (IHT) revenues are up again, with £5bn being paid in the 2017-18 tax year. This increase comes despite the introduction of the residence nil-rate band in 2017.
With more families falling into the IHT bracket, campaigners are hoping that the current review by the Office of Tax Simplification will pave the way for a simpler and fairer system.[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column width=”1/2″][vc_column_text]
What assets can be passed on free of IHT?
Everyone has a nil-rate band enabling them to pass £325k of assets tax-free. Most gifts made more than 7 years prior to death are also free of IHT, as are gifts made between married couples and civil partners. Additionally, the residence nil-rate band rises annually, reaching £175k in the 2020-21 tax year.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_single_image image=”1638″ img_size=”full” add_caption=”yes”][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]There’s a £3,000 gifting allowance each tax year (if unused, this can be carried over for 1 year). Wedding and civil partnership gifts are exempt, up to £5,000 to a child, £2,500 to a grandchild and £1,000 to anyone else. Gifts of up to £250 per beneficiary per tax year are exempt, providing the recipient hasn’t received part of the £3,000 allowance.
Regular gifts from income can be exempt in certain circumstances. There is normally no IHT payable on gifts to charities or large political parties. Pensions are not usually counted as part of an estate for IHT purposes, though other taxes may apply in some circumstances.
What can I do next?
As a regulated Independent firm of Financial Advisers, we can help you structure your assets as tax efficiently as possible.
If you would welcome a meeting without cost or obligation then please do not hesitate to contact us. After all, what have you to lose? – other than 45 minutes of your time…[/vc_column_text][/vc_column][/vc_row][vc_row][vc_column][vc_column_text]By Ivan Lyons, Director, Investment Solutions, Worthing
Contact Investment Solutions: Grafton House, 26 Grafton Road, Worthing, BN11 1QT. 01903 214640 or send an email to Ivan at: firstname.lastname@example.org or visit www.investment-solutions.co.uk