Recent research carried out by Prudential shows as much as £530 million is set to be wasted in inheritance tax (IHT) this year by people not placing life protection policies ‘under trust’ – an increase of £58 million on last year.
Not putting the policy ‘under trust’ could reduce a £100,000 life insurance pay out by as much as £40,000 if an estate is worth more than £325,000 (the IHT threshold) leaving a loved one at risk of a sizeable tax bill.
With rising house prices and an improved economy set to leave more and more taxpayers exceeding the threshold, now is an ideal time to consider good IHT planning, gifting to loved ones and getting advice.
It is often said that inheritance tax is a voluntary tax due to the number of different ways it can be avoided. However, Government statistics show that the amount of tax paid and number of families affected has been increasing over the last few years.
There are several possible approaches and a wide range of solutions available to help people maximise the amount of wealth they pass on to their loved ones, varying in complexity so professional advice is always worth seeking.
If you want to look at the potential implications for you then please do not hesitate to get in touch with Platinum.