Halesowen-based chartered accountancy firm Nicklin LLP is reminding families of the importance of inheritance tax planning after new research revealed that the UK has one of the highest rates in the world.
The threshold at which inheritance tax (IHT) becomes payable in the UK is currently £325,000, which is 10 times lower than the US where the equivalent tax is payable only on estates worth in excess of more than £3 million. The UK IHT rate is also three times the global average.
Although the IHT threshold has been maintained at that level since 2009, increasing houses prices have led to fears that more families are finding themselves dragged into the tax if no action is taken to mitigate it.
Harvey Owen, managing partner at Nicklin, said: “While countries such as Australia, Israel and New Zealand have scrapped inheritance tax in a bid to encourage greater investment and entrepreneurship, the UK has one of the highest rates in the world and a much lower threshold than many other countries.
“These figures support the importance of inheritance tax planning. While no one wants to think about what will happen when they die, it is worth periodically taking stock to consider how best to ensure that your estate will be distributed as tax-efficiently as possible, ensuring that more of it goes to your loves ones rather than the taxman’s pocket.”
For further information or ideas that may help to reduce the cost of IHT for your family, please contact us.