We have all heard that house prices are increasing, which is good news for some. However, this does mean that many more people will find that their estates will be liable to Inheritance Tax (IHT) when they pass away. The nil rate band allowance for IHT is currently set at £325,000 and is frozen until at least 2026. According to the Halifax, the average house price in the South East of England is £370,000. With this in mind, it is important to review your affairs and take action to ensure that you are making the most of estate planning during your lifetime.
So, what are some of the things you can do during your lifetime to reduce your IHT liability?
- Review your Will regularly to ensure it is up to date and tax efficient
- Take advantage of the IHT allowances available to you
- Make small gifts on customary occasions, such as weddings, birthdays and Christmas
- Make larger gifts during your lifetime being mindful of the 7-year rule
- Make regular gifts out of excess income
- Leave a portion of your estate to charity so that your estate benefits from a lower rate of IHT (36% rather than 40%)
- Ensure that your pensions and life insurance are nominated to pay out to people of your choosing, rather than to your estate
Before taking any action, we would always recommend obtaining proper legal advice to ensure that what you are proposing to do is right for your individual circumstances. We can help guide you through the process of reviewing and drafting your Will, as well as outlining any estate planning you should consider.
If you would like to speak with a member of our team about your Will and Estate Planning, please email firstname.lastname@example.org or call 01256 320555.