Inheritance Tax – not making a Will could land your next of kin with a hefty bill

Inheritance Tax (IHT) payments are expected to reach record levels with the latest figures predicting that the Government will received £900 million more than they had originally predicted.

However, there are a number of ways that you can plan ahead in order to reduce the burden of IHT payable on your estate when you are no longer here.

One of the simplest and most effective ways of reducing the IHT bill payable on your estate, is to make a Will.

If a person dies intestate (without a valid Will in place) their assets are handed out according to strict set of rules.

Dying without a Will is more common that you might imagine – around one in three people die intestate.

Back in 2014, the comedian and actor, Rik Mayall, died unexpectedly and probate records revealed that he had not put in place a Will, giving instructions on how his £1.2 million estate should be shared out amongst his family.

In cases such as this, where a married person with children dies without a Will, intestacy rules give a portion of the deceased’s assets to any surviving children, triggering a potential tax liability if the assets exceed the threshold.

However, if a Will is in place, more or all of the assets can be left to the surviving spouse, providing time in which to make other arrangements to reduce the eventual Inheritance Tax bill at the death of the second spouse.

At Moore Thompson we can help sort out your tax affairs. With careful planning, it is possible to minimise your tax liability, ensuring that more of your hard-earned money stays with you, your business and, eventually, your loved ones. To find out more, please contact us. 

Posted in Tax News.