IHT planning: Why are people putting off Inheritance Tax (IHT), planning? The family home is often the largest asset. There are not many simple and inexpensive ways to ensure that it is removed from an estate. Although equity release is one method for Inheritance Tax planning that can be effective, it has its drawbacks. You can visit us to get the best advice for inheritance tax.
People often start planning their Inheritance Tax planning by purchasing life insurance to cover any liabilities. However, this is dependent on the cost involved which are directly related to the client's ability to pay. It would be prohibitively expensive if the client were to become ill or old.
Inheritance tax planning has had a political impact, so action has been delayed. However, since the credit crunch is likely to continue for many years and any increase in IHT allowances seems now very optimistic. IHT is the easiest tax because estates are not distributed before probate has been granted. At that time, a liability to HMG is transferred to IHT.
One of the most popular myths about investments is that Individual Savings Accounts are tax-efficient. While they are extremely efficient in Income Tax and Capital Gains Tax, they are completely inefficient when it comes to Inheritance Tax planning. Clients who have accumulated substantial funds through ISA's or their predecessor peps. It is easy to evaluate the options and eliminate the 40% tax penalty.
Review (or make!) is the first step. The review (or make!) of the will for the family is the first step. This will ensure that both the nil rate and band allowances for a couple are used to their maximum benefit and that the estates go to those who have been intended.