Top 5 tips for reducing your IHT bill
By Will Grahame-Clarke, 19 Jun 18
With HM Revenue & Customs’ take from inheritance tax climbing steadily, Canaccord’s head of wealth planning gives his top five measures to mitigate its effect.
According to David Goodfellow, head of wealth planning at Canaccord Genuity Wealth Management, it’s a common misconception that IHT affects only the very wealthy.
“In fact, it applies to a large number of people and it’s costing UK residents more each year,” he said.
“IHT rules are complicated and no one likes thinking about their own mortality,” said Goodfellow. “However, not making arrangements could affect your family.”
The latest figures from the Office for National Statistics show that HMRC’s IHT tax take has been climbing rapidly. It hit a new high of £1,528m ($2,011m, €1,740) in Q2 2017, up from £1,234m in the previous quarter.
The rate on anything in your estate above the nil-rate band of £325,000 when you die is currently 40%.
So, what can people do?
1. Spend it or give it away – this is the simplest option. If you give money or assets away, you have to survive for seven years after the date of the gift, or it will still be included in your estate. However, it’s important not to give everything away as you still have to live yourself.
Click through the gallery above to read the rest of Goodfellow’s top tips for reducing the inheritance tax.
Tags: IHT
Christopher Lean says:
Life assurance provides funds to pay IHT, it does not reduce it. And it needs to be set up in trust or it will exacerbate the problem.
Placing funds in trust(DGTs and certain pensions aside) do not reduce IHT liabilities straight away, there are issues like PETs and the periodic charge to consider.
Use of Inter-Vivos plans on gifts and PETs could also be considered.