| Planning for the future and for your beneficiaries is | | | | equity could go back to the tax man and not to your |
| becoming increasingly important and these days one | | | | relatives unless some simple planning is undertaken. |
| of the key considerations in this planning is for | | | | It is important that if you are concerned, you take legal |
| Inheritance Tax. | | | | advice from a qualified expert before making |
| Right now the inheritance tax (IHT) threshold is | | | | decisions, however some of your considerations could |
| £325,000 for an individual or £650,000 for civil | | | | include: |
| partnerships or married couples. This means that any | | | | • making lifetime gifts to reduce the size of your |
| assets owned by the deceased by the date of death | | | | estate. These include miscellaneous annual cash gifts |
| that exceed £325,000 in value will usually be charged | | | | of £3,000 as well as marriage gifts of £5,000 to |
| IHT at the hefty rate of 40%. Of course, there are | | | | children and one-off gifts of £250 to anyone you |
| exceptions including, for example, leaving part of all of | | | | wish. |
| the estate to a spouse (or civil partner). And you can | | | | • seeking financial advice |
| also leave various cash gifts each year to individuals | | | | • make cash gifts to charity. These are also |
| to reduce the size of your estate, thus reducing the | | | | exempt from IHT. |
| potential amount of IHT your estate would have to | | | | If your money is mostly tied up in your property you |
| pay on your death. | | | | may not be free to make such gifts and you should |
| It's the stark reality that the possibility of having to pay | | | | take legal advice to see if there is anything else you |
| IHT is no longer the preserve of the wealthy, with | | | | can do. For example, you might be able to have a will |
| more and more people being caught in the IHT trap | | | | draw up in such a way that it can reduce your estate |
| each year. Soaring property prices in the last 10 years | | | | inheritance tax. |
| or so, barely dented by the recession, are the primary | | | | The recent change in government may provide an |
| reason, while the IHT threshold has not risen at | | | | opportunity to adjust the IHT threshold however this is |
| anywhere near the same growth rate. | | | | not guaranteed and whether any adjustment is |
| The home is usually an individual's main asset, an asset | | | | favourable to tax payers may depend upon how the |
| which takes years to pay for and saps the majority of | | | | new government plans to tackle the country's large |
| any spare income many individuals earn over the | | | | deficit. |
| years. It can be a shock to find out that some of the | | | | |