A sharp rise in inheritance tax (IHT) receipts is a stark reminder that people need to plan ahead to help reduce future bills, according to Steve Scott at Scotts Wright Solicitors.
Latest figures from HMRC show that inheritance tax receipts have risen by 7.2% since last year.
By taking advantage of available tax reliefs and planning carefully, families can reduce the impact on loved ones and ensure they can get the most out of what they inherit.
Mr Scott, managing director at Scotts Wright Solicitors, which has offices in Leyburn and Richmond, said there are simple steps to take now if you plan for family members to inherit part, or all of your estate upon your passing.
“As more estates become liable for IHT – often without people realising – it is crucial that people plan ahead to avoid large tax bills for loved ones,” he said.
If the value of your estate is below the current nil rate band allowance of £325,000, no inheritance tax (IHT) is owed, provided the allowance hasn’t been reduced by relevant lifetime gifts.
Mr Scott said in the case of married couples or civil partners who leave their entire estate to each other, HMRC permits the full transfer of the nil rate band to the surviving partner. This effectively doubles the allowance to £650,000.
He added: “Even if only a part of the estate goes to your spouse, the unused portion of the nil rate band can still be transferred upon the death of the second spouse.”
Additional rates of relief also apply to estates which include business or related assets. Similarly, agricultural properties, such as land used for livestock or crops can pass free of IHT, provided specific criteria are met.
Mr Scott said: “Creating a will is essential to ensure your assets are distributed to your chosen beneficiaries. Without a valid will, your estate will be divided according to the intestacy rules, which may result in your family not receiving what you intended.”
Contact Scotts Wright Solicitors today to start the conversation to bring peace of mind to you and yours. Phone 01969 622227 or email enquiries@scottswright.com.
Scotts Wright Solicitors is a member of the Association of Lifetime Lawyers, which represents a community of the most qualified legal professionals in the UK supporting vulnerable and older people with expert advice and support.