It should be remembered that sensible inheritance tax planning for future generations can make a massive difference over time enabling the preservation of family wealth.
£1m inheritance tax allowance per couple?
The recent Budgets finally made good on the long standing promise to increase the inheritance tax allowances to £500,000 for an individual or to £1m for a couple.
These allowances will however be phased in from April 2017 and will come fully into force from April 2020.
All good news? Yes and no.
As always, there are a number of caveats and conditions that may catch some people out. For example the increased allowances only apply to people whose total estate, on death, is worth less than £2m.
If an estate is worth more than £2m then the additional allowances are reduced by £1 for every £2 over the threshold such that if the estate is worth £2.75m, on death, then clients will only get the old allowance of £650,000 per couple.
Another thing that wasn’t widely publicised is that when calculating whether you breach the £2m limit you must take into account all assets, including assets that are already exempt from inheritance tax such as shares in a family trading company.
In summary don’t take for granted you will benefit from the new reliefs in full.
Sensible inheritance tax planning for future generations can make a massive difference over time enabling the preservation of family wealth.
If you would like to review your current exposure to inheritance tax please contact Sue Stephens or John Elliott to arrange a meeting.
