UK Inheritance Tax Warning As HMRC Investigates Payments Following Rising House Prices | Personal Finances | Finance
The IHT threshold has remained at Â£ 325,000 since 2009 despite an increase in house prices of 4.3% per year since 2011, which means that each year thousands more people are asked to pay the rate of 40% of the IHT.
At the same time, more than half a million over the age of 75 do not have a will and four million do not have a power of attorney in place according to the latest figures.
That’s according to statistics from retirement experts Just Group who urge families to engage in estate planning as early as possible.
Stephen Lowe, director of group communications at Just Group, said: âIn its simplest form, a will ensures that your estate is divided as you would like, not according to the rules of intestate succession, and it can. there are financial advantages to planning in advance how and when. pass on heirlooms.
âNone of us like to think of being so vulnerable and it’s tempting to think ‘this won’t happen to me’ or ‘I’ll take care of it later.’
A spokesperson for the law firm said: âNow that social distancing rules related to the lockdown have eased and part of the burden of administering leave for HMRC has eased, we are expects us to see an increase in compliance activity. “
To legally reduce the amount of inheritance tax paid by a person, property or assets can be given as a gift while the person is still alive.
The people you give gifts to may still have to pay inheritance tax, but only if you donate more than Â£ 325,000 and die within seven years.
The government’s website states: âOther reliefs, such as the corporate relief, allow certain assets to be passed on without inheritance tax or with a reduced bill.