Tax planning news

You don’t have to be rich to face Inheritance Tax

30 April, 2007

The truth is, with continually rising house prices an Inheritance Tax liability is becoming an increasing possibility for more and more people.

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What’s more if someone dies without having made a Will it can lead to legal complications over exactly who benefits from an estate even resulting in the State taking a significant share on top of any Inheritance Tax due.

Jean Jones, a Financial Adviser & Stockbroker with Edward Jones in Wirral, said: “Many people don’t realise how much their estate can amount to once everything is taken into account – house, car, possessions, business interests, savings, shares, jewellery and so on. It’s very easy for an estate to be worth a lot more than the current £300,000 Inheritance Tax threshold, with tax charged at 40 per cent on everything above this limit.

An estate worth £500,000, for example, would leave a tax liability on the balance of £200,000, meaning £80,000 would have to be paid before the estate was released to beneficiaries.

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Jones said: “It’s also wrong to assume on death that everything passes to ones nearest and dearest. This is often simply not the case. But interests can easily be safeguarded by making a Will and taking advice. It is simple, inexpensive and can also help limit any Inheritance Tax liability.”