The government has launched a consultation to assess how existing legislation on wills could be updated. New legislation may encourage the 40 per cent of people who don’t currently have a will to take action, according to law firm Furley Page.
The question of whether digital wills should be introduced is likely to be one of the key topics of the consultation, as well as considerations on whether there are any benefits to reducing the age of being able to make a will from 18 to 16.
‘The obvious driving factors for the consultation are the gigantic leaps that society has taken in technology and medical understanding since the rules were first laid down in Victorian Britain. We have a 19th century law in a 21st century world, so perhaps a review is overdue,’ says Furley Page associate Joshua Williams.
He says he has seen the unfortunate result of people dying without a will or with an inappropriate one, which can cause added legal costs as well as family disharmony at a particularly difficult time.
Having a carefully planned will can also help to reduce the inheritance tax bill payable on an estate (for example by making the most of gift exemptions). That’s all the more important, given the continuing increases in inheritance tax liability.
Most recently, NFU Mutual has found that inheritance tax receipts have surged by 18.7 per cent so far this tax year, with £2.4 billion collected from people’s estates between April and August.
The sharp rise in taxes has occurred in spite of the launch in April of the new residence nil rate band (RNRB), which is designed to allow parents to pass on more of the value of their family home tax-free.
Sean McCann, chartered financial planner at NFU Mutual, says: ‘Despite the introduction of the new tax break, inheritance tax appears to be hitting families harder than ever before. Receipts have risen by almost 20 per cent and it’s clearly the result of an ever-more complicated tax system and a more aggressive approach from the taxman.’
The system of reliefs for inheritance tax is ‘fiendishly complex’, adds McCann, with complicated tax rules that mean families could be ‘inheriting less than they are entitled to’. He concludes: ‘Many families won’t realise that reliefs such as the new residence nil rate band and the spouse’s transferable nil rate band are only available if you claim them.’
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