Family Law AssociationThe Law Society of Scotland
Glasgow 0141 375 1222

About Jones Whyte Law

Parents Lack Awareness of Inheritance Tax

New research by Prudential has highlighted a lack of understanding of inheritance tax (IHT) amongst some over-55s in the UK.

According to the research, estates liable for IHT in the UK face an average bill of nearly £175,000 each, but more than two-thirds of over-55s (67%) are unaware of what the national average inheritance tax bill is. Just one in 25 UK adults (4%) correctly guessed that the average bill was within the range of £100,000 and £200,000. 

Estates are currently taxed at 40% for anything above the £325,000 limit for single people or £650,000 for married couples or civil partners. From 5th April this year an additional £100,000 per person was introduced to offset the value of the family home, taking the allowance for single people to £425,000 and £850,000 for couples. The additional allowance will rise in stages to £175,000 by 2020/21 taking the limit to £1 million for a couple. 

Despite more than a third of over-55s (35%) being concerned about having to pay inheritance tax on their estate, less than a fifth (19%) have actually taken action to reduce their potential tax bill. Fewer than one in ten (9%) are seeking financial advice, making gifts to family members (6%) and/or setting up trusts (4%).  

“Record house prices are one reason why inheritance tax receipts are rising fast,” explained Les Cameron, tax expert at Prudential. “In 2012/13 fewer than 18,000 estates had an IHT bill but the Government says that there will be 41,000 taxpaying estates in 2015/16 and that IHT receipts will hit £6.2bn by 2021/22.”

“Reducing inheritance tax bills is relatively straightforward,” he added. “People need to strike the right balance between giving their wealth away during their lifetime to reduce the size of their estate, and maintaining some form of control after their death over who can access it and when.” 

Contact Us

For expert legal advice on inheritance planning then contact our specialist lawyers today.

Should Civil Partnership be Available to All Coupl...
Workers’ Memorial Day

Related Posts

Take the First Step Now: Get Legal Advice

Invalid Input
Invalid Input
Invalid Input
Where did you hear about us?
Invalid Input

Invalid Input

Invalid Input

Invalid Input