Inheritance tax

How using an inheritance for good means less tax

Every year, millions of people around the UK give their time and money to help others.

Our own research shows that charities are set for a significant windfall as one in eight millennials who expect to receive an inheritance of more than £50,000 have already decided that they want to pass some of it on to charitable causes. 

Government should encourage people to pass on wealth during their lifetime

Research commissioned by wealth manager Quilter shows that younger generations who receive ‘lifetime gifts’ from their parents and grandparents benefit more than those who don’t receive an inheritance until the death of their relatives.

The research shows that more than 60% of those who receive money from living relatives say it makes a substantial difference to their lives, compared with 42% of those who inherit on death.

How to use Aim shares to guard against inheritance tax risk

Inheritance tax (IHT), which is levied at 40% on assets over and above the first £325,000 in an estate, is well worth avoiding.

One avoidance strategy is to invest in shares traded on the Alternative Investment Market (Aim), as the value of qualifying Aim shares can be passed on free of IHT once you have held them for two years.

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”.