Inheritance tax threshold would be £460,000 – but instead it lags behind inflation | Personal Finance | Finance


The nil rate band has been frozen for a total of 17 years. It remains at the amount it was in 2009, and will stay frozen until 2026. The band is next up for review at this point, by which time analysis suggests it could have been around £500,000 if increased in line with inflation.

However, because it lags behind, more people are being drawn into the tax net as incomes and property prices increase. 

Andrew Tully, technical director at Canada Life, said: “The nil rate band for inheritance tax has been frozen for more than a decade and as a result is woefully lagging behind inflation. 

“While IHT has historically been a tax of the very wealthy this is clearly no longer the case. 

“With property prices soaring and most personal tax allowances including the standard and residence nil rate band frozen until April 2026, this is now a concern for larger sections of society as the IHT tax net widens.”

READ MORE: Lloyds and Halifax to close another 66 bank branches – see full list

“This is partly due to more deaths in the elderly population, but also as some people make outright gifts to help family during this difficult period.”

However, there are ways for Britons to mitigate their inheritance tax bill according to the expert.

The important issue is to plan ahead as only this will help individuals to legally avoid potential liabilities.

Mr Tully looked towards actions such as setting up a trust, making use of gift allowances or gifting to charity.

However, he also added: “Pensions are also normally excluded from your estate for IHT purposes. 

“You can potentially pass on your pension in a tax-efficient way so take this into account when deciding which assets you use to provide an income in later life.”

The most important action to take, Mr Tully concluded, is to speak to experts.

Independent and regulated financial advisors are likely to be able to understand specific circumstances and make the most appropriate, and tailored, recommendations on next steps. 



Read original article here

Denial of responsibility! TechnoCodex is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a comment