Legacy Planning

How inheritance tax could affect your family, and request your FREE guide

When it comes to inheritance tax (IHT), it’s often those closest to you who will have to settle your bill. And despite it originally being aimed at only the very wealthy, since 2010 the number of people paying IHT has almost doubled.~

IHT is a ‘uniquely unpopular’^ imposition that dates all the way back to 1894, when the government first introduced estate duty – a tax placed on the capital value of land to raise the cash to pay off £4 million worth of government debt. The amount of annual IHT receipts first topped the £1 billion mark in 1993; soaring property prices caused this number to rise close to £4 billion a year in 2008. Receipts did slide back to £2.4 billion in 2010, but ever since have been increasing year-on-year.

Tackling inheritance tax

In reality, it’s no surprise a record amount of IHT is being paid. It’s believed rising house prices have brought more families into the net in recent decades. This is why it’s important your estate isn’t undervalued, otherwise your family could face an evenlarger IHT bill. There are also many rules and regulations that could unknowingly catch you out. For example, 51 per cent of over 45s don’t know that money in their ISA accounts is liable for inheritance tax, according to 2017 research carried out by Canada Life. Without the right advice, the complicated rules could make the world of IHT difficult to navigate. To help you with this, Mail Finance has partnered with Skipton Building Society. They’re on a mission to help as many people as possible plan a stronger legacy for their loved ones through no pressure advice – and this could include you, too. One of their professional advisers will sit with you to help assess the value your estate. If need be, they’ll make personal recommendations around what steps you could take next to reduce any potential liability you may have. It’s important to be aware that some solutions may put your capital at risk, so you may get back less than you originally invested. The Financial Conduct Authority doesn’t regulate some areas of IHT planning. Thresholds depend on your individual circumstances and prevailing legislation, both of which may change in future.