There is comment in the press yesterday about the rising tax take from Inheritance Tax. The increase is due to a combination of rising property values and frozen thresholds so that more estates face a perhaps unexpected bill.
It is not easy to see anything will change in the foreseeable future other than ever more estates being drawn into the Inheritance Tax net.
As a result, we think it is more important than ever to make sure you understand your estate and what your heirs may have to deal with. It is entirely possible that there are planning opportunities you can take now which will reduce the overall liability and we are happy to advise on those. The key message from the commentary today, however, is that IHT can apply where it may not be expected and where there is limited or no opportunity to reduce the actual tax charge.
In the event of a death the IHT has to be paid before one can apply for a grant of probate leading to an unpleasant catch 22 in many cases. There are some instalment options available but even so it is likely that a significant amount of cash will be needed within 6 months of the death.
At Mercer & Hole, we are able to analyse your estate and look at the options for generating the liquidity needed and developing a plan for managing the liability so that your heirs have a sense of direction in the event that the certainties of death and taxes coincide. Our financial planning and tax teams work together to make sure your affairs are in good order and there is a clear plan for managing the inevitable.