Inheritance tax

Four tricks to avoid an inheritance tax headache

Inheritance tax (IHT) is often viewed as a ‘voluntary tax’, in that it is perfectly legal to plan ahead so that you can sidestep having to pay it. All that it requires is enough time to carry through the careful application of some savvy financial planning and you can do just that.

Mind the gap: inheritance tax shortfall stands at £600 million

The tax gap for inheritance tax (IHT) stands at £600 million a year, the Office of Tax Simplification (OTS) has found.

In percentage terms, the shortfall equates to 10%. The IHT tax gap, according to the OTS, is “relatively high as a percentage of the total IHT due, compared to other taxes”.

Budget 2018: Pension, investment and tax predictions

With just a couple of days until chancellor Philip Hammond steps up and delivers the Autumn Budget, speculation is mounting over the contents of his red briefcase.

So below we round up predictions for the world of personal finance, looking at possible changes to pensions, investments and tax.

Pensions

Fifth of parents give children inheritance early

One in five parents has given money to their children in an attempt to reduce the amount of inheritance tax their families will have to pay when they die.

A total of £227 billion has been transferred, with the average value of assets given away £32,920, according to research from Direct Line. A further 19 per cent have not given their children any money yet, but plan to do so in the future.

Could you consider a DIY route to manage your family wealth?

Investing in a discretionary trust is often seen as a dodge for the very wealthy, to reduce the inheritance tax due on their estates when they die and protect family businesses where succession planning may be an issue. However, discretionary trusts can also be beneficial for those with ordinary estates.