Currently, the nil rate band is set at £325,000, and the RNRB is £175,000, allowing up to £500,000 per person to be passed on free of IHT outside the spousal exemption. However, with rising property values and frozen thresholds, many estates are becoming liable for tax. As property prices continue to rise, more families will face substantial IHT bills, unless proactive steps are taken.
Donna Branagan, Director at Rotherham based Branagans Accountancy Services, comments: “Inheritance Tax is one of the most disliked taxes, especially as many people’s estates will face a 40% tax charge for the first time after their death. With the IHT thresholds frozen until 2030, it’s crucial for individuals to plan to protect their estates from these burdensome taxes.”
David Branagan, also Director at Branagans Accountancy Services, adds: “While some people believe IHT is only an issue for the wealthy, that’s no longer the case. With rising property values, even those with moderate estates can find themselves facing significant tax bills. It’s essential to act now, so your loved ones aren’t left with a hefty financial burden.”
As IHT thresholds are set to remain frozen until 2030, families are urged to consider their estate planning strategies. One key approach is to give away assets during your lifetime, provided it doesn’t affect your standard of living. Another effective strategy is to write assets into trust, which removes them from the IHT net, ensuring that your family receives these assets more quickly and without the burden of IHT.
David Branagan further advises: “Regularly updating your will is vital. Not only does it ensure your wishes are met, but it can also significantly reduce the IHT burden on your estate.”
“In addition to updating your will, you can consider writing life insurance policies into trust, which can help your family receive the funds quickly after your passing, without facing IHT.”
For individuals looking to understand how to reduce their IHT liability, Branagans Accountancy Services offers expert guidance on navigating these complexities.
Donna Branagan concludes: “We are here to help. If you’re concerned about IHT or want to explore strategies to reduce your liability, don’t hesitate to contact us. We can guide you through the process and ensure your estate is protected for future generations.”