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IHT - The Threat Remains

Inheritance Tax (“IHT”) remains a major threat for families with significant assets. The Government confirmed in the June 2010 Budget that they will leave the starting point for IHT at £325,000 for the next five years.

There are a number of steps which can still be taken to avoid or reduce IHT and protect family assets.

• Married couples and civil partners should make Wills which leave all their assets to the other. When the survivor dies his/her Estate will benefit from the double £650,000 IHT allowance.
• Beware – the double allowance may not apply in full if you die without making a Will.
• Beware also – the double allowance does not apply at all for unmarried couples.
• Life assurance can be put in trust to cover the IHT risk. This can be particularly important for couples with young children.
• There are various investment plans available which provide both long-term IHT savings and tax-free benefits in your lifetime. These can be particularly suitable for retired people. Specialist financial advice should be taken.
• Careful use of annual allowances can avoid IHT and benefit your children.
• Existing life and pensions policies should be checked and if necessary transferred into a trust for your partner and children.

IHT is still to some extent an avoidable tax. We will be happy to help you to avoid it.

June 2010