6 tips to get your estate planning in good shape

By FMB on 

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Is it time to revisit your IHT strategy?

Latest data from HM Revenue & Customs (HMRC) revealed IHT receipts for April 2021 to March 2022 were £6.1bn, 14% (£0.7bn) higher than in the same period 12 months earlier.

Factors at play

Receipts have increased partly due to higher death rates during the pandemic, as well as due to the rise in property prices which has seen more families coming into scope for IHT. With thresholds frozen at current levels – the nil-rate band is £325,000 and the main residence nil-rate band is £175,000 – IHT is effectively a stealth tax.

Time for a refresh? IHT 6 top tips:-

Gifts – use your £3,000 annual allowance before the end of each tax year. You can also make gifts of up to £250 per person per tax year

Trusts – for example putting money into a trust to pay for a grandchild’s education or to support another relative

Make a Will – and keep it up to date

Leave money to charity – if you leave at least 10% of your net estate to charity, the IHT rate reduces from 40% to 36%

Take out life assurance – this won’t reduce your estate but instead provides a lump sum to your beneficiaries to pay the IHT bill. The policy should be written under a suitable trust

Take advice – sensible IHT planning can help to reduce the amount of IHT your beneficiaries will have to pay and safeguard your wealth for the future.

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.

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