Helping The One Million Estates on The Inheritance Tax Threshold

In recent months it has been revealed that over 1 million people over the age of 60 risk their estates entering the inheritance tax (IHT) liability threshold - which means 40% tax on the excess, or nearly half of your estate, to the taxman.

• According to a government forecast, one million additional estates are nearing the £325,000 inheritance tax threshold because of historically rising house prices; a figure which NFU Mutual believe is closer to 1.4 million estates.

Whilst many people might aim to “plan for the disposal of their estates in a tax efficient manner”, others may be in breach of Law or disappoint beneficiaries, and there are still many unsuspecting people who are unaware of the impact that their potential IHT obligations, and their Statutory Duty of Care or omissions could impact on their families.

• The Office for Budget Responsibility (OBR) forecasts have predicted that this windfall of liable estates is going to increase inheritance tax contributions by over £1 billion in the next five years.

• For the financial year 2018/19, the government received £5.3 billion in inheritance tax contributions. By 2021/22, this number will rise to £5.6 billion and the OBR are confident that in 2023/24 the total will exceed £6.3 billion.

When so many estates are hovering on the edge of the IHT threshold, it is imperative that estate owners are offered appropriate guidance that could help to minimise the overall total they are liable to pay. How many people are aware that Executors and Trustees may be held personally and fully liable for losses, through negligence or incompetence, or through lack of knowledge in expertise required?

We operate through the Institute of Professional Willwriters (IPW) and Institute of Scottish Professional Willwriters (ISPW). These have many members with an expert understanding of estate taxation, who could help the masses that are about to be affected by IHT complications. With my background as a broker consultant for Scottish Widows and as an IFA for National Insurance Broker British Medical Assurance (BMA Services Ltd) Financial Planner, before setting up my own Financial Planning business – we have access to experts in the many and various fields required. Our Academy offers a range of courses and training to ensure that our practitioners remain up to date with important issues which can impact on their clients.

Our processes and strategies can be used to tackle IHT issues as well as developing the capital gains tax (CGT) market. Often the implications for Income Tax are overlooked, along with Stamp Duty and Stamp Duty Land Tax. There are many opportunities where tax planning and income planning are designed with your best interests uppermost. As a result, risks are reduced and your lifetime cashflow is planned with you in mind, without bias of third parties.

Businesses and Business succession plans need to be addressed to provide security and control for your family.

1. As more and more estates are dragged beyond the IHT threshold, the importance of these issues is only going to increase.
Make sure you are in a position to confidently provide your family, or the beneficiaries of an estate or a trust, with good, sound advice from a professionally qualified adviser, who holds the appropriate qualifications and professional Indemnity Insurance (P.I. ) as a minimum requirement, paid by you, for you.

You can sign up for our quarterly Newsletter – the Westminster Wills Ltd Taxation and Financial Focus today – and receive our regular bulletins and updates as an Introduction to Estate Taxation today.

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