Monday, August 21, 2006
Is Inheritance Tax fair?
Inheritance tax (IHT) affects estates which are valued at more than £285,000.
There has been opposition to the tax from all sides of the political spectrum but the government has so far avoided making any changes.
Yesterday former cabinet minister Stephen Byers called for a scrapping of inheritance tax calling it a Tax on thrift, hard work and enterprise. I dont think the tories would ever scrap IHT all together but they might increase the threshold to a more realistic level which would take a large percentage of the families in the trap at the moment.
The Treasury insists that Inheritance tax is "fair" and only effects 6% of Estates.
I don't know where the treasury gets its' figures from but the majority of clients we see are in the "Inheritance tax trap", due to either hard work, good financial management or simply due their houses rapidly rising over the last few years. All these families want to do is pass on their estates to their children. There is no hint of tax avoidance for most of the clients we see who sometimes don't even realise they have a problem.
For married couples and people in a civil partnership there is one very simple step they can take. Get their Wills written!!.
Simply by using both their personal Nil Rate band allowances for IHT they can get their estate up to £580,000 before any IHT is due. Dont forget there is no IHT between spouses due to the inter spousal exemption.
For more information go to Estate Planning Solutions or visit our on line channel Willcare.co.uk
Posted by Mark Jackson at 8:43 p.m.