An increasing number of estates are falling over the inheritance tax threshold as a result of large rises in property values, wealth adviser Towry has warned.
Inheritance tax (IHT) is normally paid at 40% on any part of an estate valued over £325,000. Traditionally it was a tax that only really affected the wealthier households, but rising house prices have pushed up the values of many more estates, taking them over the threshold and liable for the tax.
The problem is compounded by the fact that the IHT threshold has remained frozen at £325,000 since 2009, and is not due to rise until 2019.
With one in ten UK households now sitting on assets totalling £1 million or more, the freezing of the nil rate band will see more money finding its way to the taxman if people do not take action to mitigate their potential inheritance tax liability, says Towry.
From a base of 17,000 estates paying IHT upon the owner’s death in 2010-11, the current freeze on the nil rate band could bring in an additional 5,000 estates per year that are liable to an IHT bill.
Towry highlights that there are options available to people to help reduce their IHT bill, and recommends that people take professional estate planning advice to identify the measures best suited to their individual circumstances.
For further information on our services, including will writing and executry services, please contact us today at our Stirling office on 01786 235 235, or at our Tillicoultry office on 01259 753330, to speak to our solicitors.