Since the Autumn Budget, concerns over Britain's inheritance tax (IHT) have surged, leading to a spike in inquiries from families seeking to minimize their tax liabilities. Experts report a doubling or even tripling in consultations regarding IHT planning strategies, with individuals and businesses exploring options like gifting assets while alive, setting up trusts, and utilizing pension funds to reduce their future tax burdens.
Enquiries have at least doubled since the Budget, says one expert, who believes these are now likely to increasethey had seen enquiries from clients with concerns about Britain’s “most hated” tax grow exponentially since the Budget.
“Understandably, many of our clients aim to pass on as much wealth as possible to their loved ones, therefore in light of these changes, people tend to opt for a ‘giving while living’ strategy, which they have more control over.”She also announced that claims for business property relief and agricultural property relief will be capped at £1m per taxpayer with tax charged at 20 per cent on the value in excess of the cap.
“In the past they would have been tempted to wait until they were age 75, because if they died before that age their beneficiaries would not be liable to income tax as they drew the pension and continuing to hold the pension was not a problem for the pension holder as there would be no IHT if they died.
Doing this will give his business more protection and more certainty around future tax changes, as, if his son were to die unexpectedly, he would also have a large amount of unplanned IHT to pay, Bailey said. She said: “Lots of people looking for advice around prenuptial and postnuptial agreements have been in touch, with many looking to protect gifted or inherited assets in the instance of a relationship breakdown, where a financial dispute can arise.
“If clients are looking to give away assets before death to reduce their liability then it may still be worth giving away other less tax efficient assets that are part of their estate first before starting to look at strategies to gift the pension.
INHERITANCE TAX GIFTS TRUSTS PENSIONS TAX PLANNING
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