‘It took 13 years for us to make it big’

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The Sunday Telegraph - Money & Business - - Money -

two in­di­vid­u­als’ al­lowances can be com­bined when the se­cond per­son dies, giv­ing a to­tal of £650,000.

From April 2017 an ad­di­tional £100,000 al­lowance per per­son has ap­plied to a fam­ily home. This will rise to £175,000 each by 2020, mean­ing a cou­ple will be able to shield £1m from the Gov­ern­ment.

An­other con­ces­sion here is “life­time gift­ing”. Danby Bloch, a tax ex­pert at ad­vi­sory firm Helm God­frey, said this tended to help the very wealthy who could af­ford to make large tax-free gifts through­out their life, but was more re­gres­sive for the “mid­dle rich”, whose wealth would pri­mar­ily be prop­erty.

Ernst & Young un­der­took com­par­isons across a num­ber of dif­fer­ent coun­tries us­ing an es­tate val­ued at £1.5m, made up of half prop­erty and half cash, be­ing passed to a di­rect de­scen­dant (such as a child or grand­child).

The cal­cu­la­tions as­sumed that the es­tate was owned by a mar­ried cou­ple and was passed be­tween them when the first spouse died. This al­lowed for regimes, such as in Bri­tain, where exemptions can be com­bined.

Of the coun­tries an­a­lysed us­ing these as­sump­tions, no tax at all would be paid by the fam­ily in Aus­tralia, Italy, the US and Swe­den.

A Cana­dian fam­ily would pay no in­her­i­tance tax, although some cap­i­tal gains taxes might ap­ply at death. A fam­ily in Sin­ga­pore might have to pay stamp duty on trans­ferred prop­erty or shares.

In Switzer­land death du­ties are cal­cu­lated re­gion­ally, by can­ton. Some levy none.

Ger­many’s sys­tem means the es­tate would be taxed at ei­ther 15pc or 4pc, de­pend­ing on whether the de­scen­dant moves into the in­her­ited prop­erty. It would be taxed by a max­i­mum of 15pc in Den­mark.

Bri­tain, mean­while, would tax the es­tate at 40pc above the cou­ple’s com­bined per­sonal al­lowances, which in this case means a pay­ment of £259,000. This equates to an ef­fec­tive tax rate (the tax paid as a pro­por­tion of the value of the es­tate) of 17.3pc. While this

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