Gifts out of income and their benefits to beneficiaries

30 per cent of UK adults do not fully understand Inheritance Tax

New research suggests that almost a third (30 per cent) of Britons aged 55 and over are confused about Inheritance Tax (IHT) due to the fact they do not fully understand key IHT terminology.

In a survey carried out by insurer Alan Boswell in June, half (44 per cent) of Britons quizzed said that they were unaware that IHT was levied at a rate of 40 per cent on eligible estates.

Meanwhile, more than a quarter (27 per cent) admitted that they did not know that all estates valued at £325,000 or more are liable to pay IHT at this rate if families have not sought specialist IHT planning advice in advance in order to mitigate their IHT liability.

Commentators have voiced concerns that more needs to be done to raise awareness of IHT, as an increasing number of British families are being hit with hefty IHT bills every single year.

Back in May, official figures published by HM Revenue & Customs (HMRC) revealed that the Treasury collected a record-braking £5.2 billion in IHT last year alone.

Most suspect that the increase is due to a combination of rising property prices and families’ failures to seek specialist tax planning advice.

Under the right guidance, there are a number of ways that individuals and families can mitigate their IHT liability. For example, anyone who wishes to pass property to direct beneficiaries in their Wills can make use of the additional residence nil rate band, which can enable individuals to pass on an extra £125,000 in property value completely free of IHT.

Rotherham Taylor can assist with IHT planning advice, but we are also one of a small number of accountancy practices in the UK to be licensed to provide probate services by the Institute of Chartered Accountants in England and Wales (ICAEW).

This means that our team can offer a wide range of probate services to clients, from obtaining a grant of probate, to identifying and distributing assets according to the terms of a Will.

Furthermore, our existing detailed knowledge of a client’s financial affairs means that we can act quickly and effectively on probate matters with consequent cost benefits.

For more information about our probate services, please contact us.

Three common problems with probate and estate management that we can solve

No-one tells us how to prepare for the events which follow the death of a loved one. And unfortunately, it’s not unusual to run into complications. From paying too little or too much Inheritance Tax, to simply not having the energy or composure to carry out administrative tasks such as probate, it may seem like the whole world is against you.

That’s why we want to solve these problems for you. Here are just a few ways our Chartered probate service can help you, your friends or your family with probate and estate management.

1) You are worried about paying too much Inheritance Tax on death

And that’s understandable. The tax system is set up so that it takes years of training to learn about all the reliefs and rates available to you. That’s why an accountant is the perfect partner to administer your estate. We’ll minimise the amount of Inheritance Tax you have to pay while ensuring that all your debts are paid in full.

2) You are concerned your family do not have the skills or time to deal with what will be a complicated estate following death

Probate can be quick and easy. But it can also be long and complicated, depending on your exact circumstances. Usually, if you are passing down a business, investments, or other alternative forms of wealth, we would recommend a professional to oversee the administration of the estate to ensure a smooth and seamless succession.

3) You are unhappy with the fees charged by solicitors and banks

Contrary to popular opinion, an accountant can carry out the same high level of estate and probate work as a solicitor and bank can*. The difference is that we charge set fees, rather than a percentage. This means we can offer you the same service, at a much lower rate.

For more information about our probate services, please contact us.

*We are unable to carry out contentious probate. If your estate is disputed while under our care, we will pass the contentious aspect over to a reputable solicitor of your choice.

Record £5.2 billion Inheritance Tax take

Up-to-date figures from HM Revenue & Customs (HMRC) suggest that the Treasury collected a record-breaking £5.2 billion last year.

Most commentators suspect that ever-rising house prices and a successful stock market are partly to blame for the Revenue’s record IHT take. But research highlighted in The Express suggests that at least part of the problem lies with British families themselves – who are failing to seek appropriate tax planning advice.

In April 2017, a new IHT allowance was introduced which enables individuals who wish to pass on a family home to their direct beneficiaries in their Will to tap into an additional tax-free allowance.

As of April this year, this allowance is worth £150,000 to each individual, but according to the research cited in The Express, only one in six taxpayers have taken advantage of the new allowance – known as the main residence nil rate band (RNRB) – since it was first introduced last year.

In England and Wales, IHT is levied at a rate of 40 per cent on all estates valued at £325,000 or more. However, by using the RNRB and other tax planning initiatives, it is often possible to pass on a large estate much more tax-efficiently.

Rotherham Taylor can assist with IHT planning advice, but we are also one of a small number of accountancy practices in the UK to be licensed to provide probate services by the Institute of Chartered Accountants in England and Wales (ICAEW).

This means that our team can offer a wide range of probate services to clients, from obtaining a grant of probate, to identifying and distributing assets according to the terms of a Will.

Furthermore, our existing detailed knowledge of a client’s financial affairs means that we can act quickly and effectively on probate matters with consequent cost benefits.

For more information about our probate services, please contact us.

Britons expecting to receive sizeable inheritance from parents and grandparents

Research carried out by insurance company Canada Life recently found that one in 25 UK adults are expecting to receive an estate worth £1 million or more from their parents and grandparents.

On top of this, the study – which surveyed more than 1,000 people – found that one in 50 believed that they were due to receive an estate worth £5 million or more.

Wealth among UK families is growing rapidly, but anyone who intends to pass on a sizeable legacy to their loved ones when they die needs to plan ahead accordingly.

Without a legally-recognised Will in place, you cannot guarantee that your estate will be passed on in line with your wishes. On top of this, Inheritance Tax (IHT) can pose a real problem if your estate is worth £325,000 or more.

IHT is levied at a rate of 40 per cent in England and Wales, but various options are available to families and individuals who wish to mitigate their tax liability.

It is important to seek specialist tax planning advice from an early opportunity and to do so with advisers you trust.

Rotherham Taylor can assist with IHT planning advice, but we are also one of a small number of accountancy practices in the UK to be licensed to provide probate services by the Institute of Chartered Accountants in England and Wales (ICAEW).

This means that our team can offer a wide range of probate services to clients, from obtaining a grant of probate, to identifying and distributing assets according to the terms of a Will.

Furthermore, our existing detailed knowledge of a client’s financial affairs means that we can act quickly and effectively on probate matters with consequent cost benefits.

For more information about our probate services, please contact us.