Research has revealed that the number of people expecting to bequeath large sums of money when they die has doubled over the past ten years.
The wealth of people in their 80s has increased by 45% over the past decade, while the number of elderly people that think they will leave £150,000 or more to their beneficiaries has risen from 24% to 44%.
The rise in wealth among the elderly is a result of higher home ownership and rising property prices, which is expected to result in an increase in the number of families who have to pay Inheritance Tax (IHT).
The current IHT threshold means that individuals pay tax on estates worth £325,000 or more. From April 2017, the introduction of the transferrable main residence allowance (TMRA) means that this figure could be increased by an extra £100,000 per person, rising to £175,000 per person in 2021. As a result, married couples and civil partners could potentially pass on estates worth up £1 million to beneficiaries without incurring any IHT charges.
Tom Curran, Chief Executive of estate administration specialist Kings Court Trust, said: “The increased wealth amongst the elderly means that many ‘ordinary’ families that have benefitted from the rise in property values will also be liable for IHT - something which they may not have considered likely 10–15 years ago. With the forthcoming changes to IHT legislation, the landscape is likely to become even more complex for clients and advisers.
When it comes to the actual payment of IHT, we recommend using a specialist to ensure that all tax work is dealt with professionally. At Kings Court Trust we deal with the whole estate administration process, including IHT, on the client’s behalf. We take on full responsibility and liability so that they don’t have to worry; we also have a unique estate insurance policy which protects the family against any claims on the estate for ten years.”
For more information on Kings Court Trust’s estate administration service visit, www.kctrust.co.uk.