The Treasury predicts that the number of people liable to pay inheritance tax will increase by approximatley 35% this year, are you one of them?
The initial signs of recovery in the ecomony is fueling house price rises. This is expected to push thousands more people over the current inheritance tax threshold. The numbers are expected to increase further again next year.
Your estate becomes liable to inheritance tax when the value exceeds £325,000 for an individual or £650,000 for a couple, one of the lowest in any country other than Ireland.
This impact is further compounded by proposed changes to the inheritance tax regime applied to trusts, currently subject to Government consultation.
Many advisors are calling for the threshold to be increased, as promised by the Conservative Government but subsequently blocked by the Coalition. Much will no doubt depend on the forthcoming General Election, but a review of the whole inheritance tax system seems to be well over due.
In the meantime, now is a good time to review your estate and put together a plan for the future. Whatever your views on paying inheritance tax as a minimum it helps your nearest and dearest to know what liability your estate will face on your death and how this can be settled.