The number of people caught in the Inheritance Tax “trap” is set to rise over the next four years.
The Government has fixed the level below which no tax is paid – an effective tax rise when inflation is taken into account.
Currently, any individual with an estate worth more than £325,000, or a couple whose estate is worth £650,000 will pay a huge 40% tax on the excess. The government has fixed these limits until 2014.
David Dunning, General Manager at Chartered Financial Planners, cba financial services in Beverley said:
“Many people put off taking any action to mitigate inheritance tax as the Conservative Party had suggested raising the limit to £1,000,000 if they got into office. Obviously, they are not in a position to do this and we now know the limit will remain unchanged for at least 4 years.
However, with some careful planning, it is possible for anybody who may be affected to avoid the tax. As Lord Jenkins said in 1968- Inheritance
Tax is broadly speaking a voluntary levy paid by those who distrust their beneficiaries more than they dislike HM Revenue & Customs .
The cost of Inheritance Tax, together with Long Term Care are the two biggest threats to your hard-earned money, and yet there are ways to reduce the impact of both, and ensure you pass more of your money to those who are important to you.”
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