INHERITANCE TAX – PLANNING
Synopsis: The number of estates liable to inheritance tax appears to be on the rise. With this in mind, are your clients maximising use of available exemptions and carrying out suitable planning strategies?
Date posted: Thursday, April 10, 2014
According to recent research carried out by the Institute of Fiscal Studies (IFS), the number of estates which will be liable to inheritance tax (IHT) will quadruple from 2.6% in 2009/10 to 10% in 2018/19.
The nil rate band has remained static at £325,000 since 2009/10 and is likely to remain so until 2017/18. It appears from the study that this eight-year freeze represents a cut of 22% or £70,700 relative to inflation as measured by the Consumer Prices Index. As a result, the IHT take will increase to £5.8 billion in 2018/19. In that year, IHT liabilities will take a bigger share of the national income than at any time in the past 45 years, say the IFS – unless the tax is reformed.
COMMENT:
With the nil rate band being frozen for so many years, clients ought to consider whether or not they are maximising use of all available IHT exemptions and planning options where possible given their individual circumstances. Our recent bulletin serves as a reminder of some of these basic planning points which can be taken advantage of.
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