The Labour party is proposing further changes to Inheritance Tax (IHT) laws that could mean families across the UK will pay even more tax if they are elected to power.
The new regime would include:
- adjusting the tax-free allowance so that it is based on the recipient and not on the person who dies
- reducing the tax-free allowance from £325,000 (current) to £125,000
- taxing anything above the allowance via income tax (which potentially could be more than 40%, which is the current IHT tax rate)
I am sure there will be many more proposals to come but, luckily, there are some actions you can take now to plan for Corbyn’s potential rule changes and protect your family’s future wealth:
Give your money away – make gifts to your children or other beneficiaries in your life-time if you can. And if you do, we always recommend you do so through a trust arrangement for protection and future Inheritance Taxation.
Make sure your Will is up to date: Wills should have been reviewed post-2015 when the Residential Nil Rate Band (RNRB) was introduced, to make sure that the full RNRB can be claimed even if your estate exceeds £2m. If you are a Client, we have reviewed your Will since the change. Prospective Clients can have your Will reviewed as part of attending an Initial Meeting with us.
Set up a Probate Trust – put money into a Trust to pay Probate Fees, which are planned to increase by 3,700%
Spend, spend, spend – the best way to mitigate an Inheritance Tax issue. Thinking of taking a big trip? Do it! But seek professional advice before you do. Make sure you have sufficient wealth to see you through the rest of your life.
If you think you need more advice on how to structure your estate for your family’s benefit, get in touch with us so we can help.
Redwood is one of the Souths’ leading Pensions, Investments, Wills, Trusts & Estate Planning providers and we are dedicated to helping families to grow, protect and enjoy their wealth. With our unrivalled knowledge of Estate Planning and Probate, we can advise on any situation. Join us at one of our Free Public Information Seminars: Book online Book Me A Place!, Call us on 01489877 547 or Email firstname.lastname@example.org to book a no-obligation Initial Meeting with us to review your financial planning needs.