You are here: Home - Retirement - Retirement planning - News -

Wealthy Britons in the dark over inheritance tax rules

Written by:
Wealthy Britons risk leaving their loved ones with an unexpected tax bill after a new report revealed less than half are aware of the inheritance tax threshold.

A report by Close Brothers Asset Management found that just 47% of those liable for inheritance tax on their personal assets knows the correct threshold, with 14% wrongly assuming the threshold is £500,000 or higher.

With the threshold currently frozen at £325,000 and with assets such as property rising in value, the number of Britons set to fall into the threshold is forecast to double from 21,000 in 2012 to 42,000 by 2016/17, according to accountancy firm, Grant Thornton.

Worryingly, more than a third (34%) of those with assets over the threshold have not put any plans in place to protect their wealth and almost the same amount (32%) do not believe they need to do anything to protect their assets.

The research found that despite their exposure to inheritance tax, 43% of the affluent respondents have never sought professional advice from a lawyer, accountant or financial planner and 11% have not discussed passing on their wealth with anyone at all.

Patrick Haines, regional head of advice at Close Brothers Asset Management said: “When it comes to personal finances, those looking to pass on their wealth cannot let inheritance fall under the radar. It can only be ignored for so long. With £75bn being inherited in the UK every two years, large sums of family wealth are left unnecessarily exposed to tax. A combination of planning inertia and a general lack of awareness is to blame, but it is crucial that those who will see their estates subject to the tax understand their liability.

“To ensure the smooth transfer of wealth to future generations, further education on tax saving measures and a much greater focus on early financial planning is essential. But this needn’t be a challenging process. There are professionals who can offer expert guidance on inheritance tax and can help people understand their exposure to higher taxation and the actions that could be taken to mitigate it.”

Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Seven ways to get help with energy bills this winter

We knew today’s announcement was going to be painful, but it’s still a shock to the system. When this kick...

Flight cancelled or delayed? Your rights explained

With no sign of the problems in UK aviation easing over the peak summer period, many will worry whether holida...

Rail strikes: Your travel and refund rights

Thousands of railway workers will strike across three days this week, grinding much of the transport system to...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week