Lowes Magazine Issue 120

TAX

Tax planning needed as IHT numbers rise

LATEST FIGURES SHOW THAT GOVERNMENT revenues from Inheritance Tax (IHT) have risen again – by £500 million year on year, bringing in 2.1billion for the Treasury from April to June 2021. The rise is in part because 2020 figures were affected by the pandemic which reduced HMRC’s ability to contact estates for tax payments, but also because the freeze on the nil rate band and the residence nil rate band at the last Budget is dragging more and more people into paying IHT. The need for IHT planning is greater than ever. There are various options for IHT mitigation, ranging from the simple to the complex, which can be considered by families to help reduce their potential IHT liabilities. Your first port of call for advice should be a Lowes Consultant. But also important, is for families to plan ahead outside of financial considerations. Talking about inheritance can be one of the hardest topics to broach and many parents put off discussing the issue with their children.

Yet, family conversations around managing wealth in old age and passing it on to the next generation have never been so fundamental, particularly in a time when demographics show people are living longer but not necessarily in good health. In this respect, later life planning, including the potential for long term care, is now a pre-requisite of any structured financial planning, despite government recent proposals to cap the amount an individual will be expected to pay for care. This planning may never be needed but if it is, it is far better to have had the conversation and put a plan in place, so families can overcome the feelings of worry and know what is going to happen.

If you would like help with tax or later life planning, or know someone else who would benefit, Lowes can help.

10 Lowes.co.uk