Following the recent Budget, the Inheritance Tax (IHT) threshold for individuals has been frozen at £325,000 until 2015. Since the Conservative Party's suggestion that they would raise the Inhertiance Tax threshold to £1m, IHT had become a non-issue for many individuals and couples. In the current climate of austerity and the new coalition government, the threshold has been frozen.
Many individuals held off carrying out any form of IHT planning in the hope that the new £1m threshold would come into operation. With there being few signs that this will occur, IHT is suddenly back on the agenda.
As a result of the quantative easing measures, higher inflation seems to be on the agenda with a possible rise in interest rates. Whilst property prices remain static, the financial markets are recovering and growing resulting in higher asset values. With the IHT threshold frozen for the next five years, the net effect is that the IHT threshold is reducing in real terms.
There are a number of ways clients and individuals can reduce their potential IHT liability and IHT planning can help to minimize a potential IHT liability and ensure individuals can maximise the amount of their estate passing to their children and beneficiaries.
For more information on how to reduce your inheritance tax liability, please contact
John Rouse.
