Inheritance tax burden becoming a top priority
deVere’s findings comes as the latest the latest Office for National Statistics data reveals that the inheritance tax take for the year ending April 2013 is at its highest since 2007. It is the third consecutive year that revenue from IHT has increased.
Nigel Green, deVere Group’s founder and chief executive, said: “Ensuring financial security in retirement has traditionally been the top priority in most people’s financial strategies.
“However in recent months reducing the burden of inheritance tax has been becoming increasingly as important as retirement planning for more and more of our clients.
“This trend, I would suggest, has come about because a growing number of people are being pulled into the IHT net for a number of reasons – not least because the threshold at which IHT is charged was frozen at £325,000 for individuals and £650,000 for couples until 2019, and property prices are increasing and household savings are recovering.”
He added: “Leaving a legacy to loved ones is a very human instinct and people feel especially aggrieved by this form of tax [IHT] because it is, in effect, a form of double taxation as tax is being paid on assets which have already been paid for and previously taxed.
“As such – and because more people are now being affected by it, and no doubt because there is an ageing population – an increasing number of families are keen to prioritise estate planning ahead of other factors in their long-term financial strategies in order to mitigate the potential IHT liabilities.”
Experts suggest ways to mitigate the IHT burden include holding properties as ‘tenants in common’ with your spouse, investments that qualify for relief, gift allowances, and establishing trusts, amongst other options.