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Mitigating Inheritance Tax
In response to perceived concerns about the
effect which rising house prices were having on inheritance tax, the 2015
summer budget introduced the concept of a transferable main residence
allowance. Starting at £100,000 for the tax year 2017/18, the allowance is set
to increase by a further £25,000 for each following three tax years, in effect
increasing the tax-free inheritance tax threshold from £325,000 to £500,000 per
individual by 2020/21.
However, with this transferable main
residence allowance yet to come into force it appears that funds raised through
inheritance tax are rising significantly. Analysis by private client law firm
Wilsons has shown that since 2010 the amount raised from inheritance tax has
risen from £2.47 billion to £4.72 billion. Moreover, inheritance tax payments
in the 2015/16 tax year were 17% higher than in the previous year.
The government estimates that the
forthcoming changes will by 2020/21 result in a nil rate of inheritance tax for
an additional 30,000 estates per year. In the meantime individuals and couples
may wish to consider whether an inheritance tax mitigation scheme would help
them to maximise the amount which they are able to leave to their heirs.
If you’re looking for advice on
investments, or if your situation has changed and you may therefore need to
review your existing investment portfolio, contact Beckworth by using one of
the links on our website.
Call us today: 01392 678 555