Younger generation to benefit from new IHT gifting allowance
A recent study by Old Mutual Wealth has found over 60% of the 17.2 million people over 55 would consider gifting more to their loved ones, with 71% wanting to pass on their wealth during their lifetime.
This is good news when you consider the recent updates around gifting allowances; the annual gifting allowance is currently being reviewed with the hope to increase the allowance from £3,000 to £11,000. This could see money cascading to the younger generations - using the Bank of England Inflation tracker it would now be permissible to gift £10,932 per tax year had the annual allowance tracked inflation.
At the same time, HMRC collected a record high £5.3bn through inheritance tax (IHT) last year, with the latest figures revealing a 13% increase over the £4.7bn paid in IHT in 2016/17, caused by the freeze on the IHT threshold of £325,000. Subsequently more families were hit by tax bills.
Managing Director of McCrea Financial Services, Douglas McCrea said:
"Significant amounts of individuals' wealth are now being taken by HMRC through IHT. The value of IHT, worryingly, continues to rise at an alarming rate. Most people wish to leave as much as possible to their loved ones when they are no longer around, however, unfortunately this can be complicated. Individuals should seek professional advice on estate planning to ensure their assets remain as tax-efficient as possible."
At McCrea Financial Services we have a wealth of knowledge of the IHT taxation system and would be more than happy to assist you in ensuring you leave as much as possible to the people you wish to receive your hard earned cash.
We fully review your financial affairs to identify what the current liability is and assess your capital and income needs.
We can help with advice around gifting and using your allowances each year. We work together with a carefully selected panel of trusted professional connections, such as solicitors, who can help ensure your legal affairs (wills and trusts) are set in place correctly to meet your requirements.
Find out how we can help with your inheritance tax planning here.
If you would like to arrange an initial free no-obligation meeting you can do so by calling us on 0141 572 1340 or via email.