Inheritance Tax Changes: Are You Any Better Off?
October 19th, 2007
In his recent pre-Budget speech, the Chancellor, Alastair Darling, introduced a new change to Inheritance Tax (IHT) rules.
At present, each person has a nil rate band, on which there is no tax to pay. For the tax year 2007/08 this is £300,000, and means that on death there is no IHT on the first £300,000 of your estate. Any amount above this is taxed at 40%. However, since 9 October 2007, a claim can be made to transfer any unused nil rate band to the estate of the surviving spouse or civil partner.
Married couples and civil partners with assets less than £600,000 can be confident that their children will not inherit an IHT bill, and it avoids the need to draw up a Will with a trust to utilise two nil rate bands.
However, the new rules do not apply to unmarried couples, divorcees and single people. They still require advice on suitable plans that can be put in place for inheritance tax planning.
Of course, there will also still be married couples and civil partners who have assets which exceed the two nil rate bands, and they too will still need IHT planning to shelter their assets.
There are several methods that can be used for inheritance tax planning. These include taking out life assurance, making gifts and setting up Trusts. Anyone with an IHT issue, even after the Chancellor’s changes, should talk to a properly qualified adviser to work out what’s best for them.
To speak to a Torquil Clark Financial Planning adviser, call us on 0800 294 7199, or get in touch with us online.
Author: Rachel Jefferson
October 19th, 2007
Category: Financial Advice.
