Property

Why Inheritance Tax planning is crucial

More people could be set to pay inheritance tax (IHT) under new ‘stealth’ plans to be announced by the chancellor.

It’s believed that next week, the threshold above which people must pay IHT will be frozen until April 2028 – a bid by the government to raise £1 billion of around £54 billion of debt.

This means that those who have already paid some tax would have to give the treasury a fair amount of their estate.

Families currently have to pay 40pc inheritance tax on the value of an estate above £325,000.

But fixing the threshold, rather than rising in line with prices, means more people’s estates are pulled above the tax threshold – known as ‘fiscal drag.’

According to some estimates, the freeze will mean 10,000 more families are liable for IHT.

Zoe Fleming, head of our Wills, Trusts and Probate Team said: “Fiscal drag is going to push more taxpayers into higher tax bands and this means IHT bills are going to soar by thousands.

“With the Autumn Statement decision to the House of Commons being made next week, it’s really important now more than ever that people seek IHT advice as soon as possible.

“We can show you the various ways you can reduce the size of your taxable estate during your lifetime, such as by making gifts, setting up trusts, charitable giving and other forms of planning.”

If you’d like to speak to a member of the Wills, Trusts and Probate Team, call them on 01772 799 600.

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