Britain’s Most Hated Tax

by Steve Worsfold of Sussex Will Writers

It is no Longer Possible to Confidently Predict the Inheritance Tax (IHT) Payable on Your Estate Without a Review of Your Will. 

New research has revealed that Inheritance Tax (IHT) rates in the UK are more than double the EU average.

Advisers have labelled IHT rates as a ‘contentious subject’ and a recurring ‘hot potato’ as, on average, individuals in the UK pay 23.9% (£564,523) in Inheritance Tax when passing on an estate worth £2.4m to their beneficiary.

Too Complex? 

In comparison, individuals in the EU pay an average of 10.3% (£243,297) on an estate of the same size, as revealed by accountancy network UHY International. Compared to its European counterparts, the UK has the highest IHT rate followed by Belgium with 27.08% and France with 25.3%. Some experts have claimed that the UK’s IHT regime is too complex, as several different allowances must be considered when calculating what is owed in IHT.

A Contentious Subject 

IHT has Long been a Contentious Subject in the UK. Freezing the IHT threshold at £325,000 for over a decade, has resulted in more families being caught out by the tax. This has led to the Treasury facing growing criticism. At least from 2021 it will increase each year by CPI.

Successive governments have taken steps to take it out of the headlines. 12 years ago this was achieved through the introduction of the transferable Nil-Rate Band, which automatically did for people what they previously could have done for themselves.

Britain’s Most Hated Tax

There will always be debate about the rights and wrongs of taxing inherited wealth, but the high rate of IHT in the UK is undoubtedly a factor for those planning to pass on as much of their accumulated wealth as possible.

IHT in the UK can be very complicated, and anyone with a sizeable estate will need professional guidance to navigate it. Sussex Will Writers suggest that for 2020 you take the first step towards passing on your assets to your loved ones by having us review your Will at no cost.

Could you do with some FREE, sound advice on:

• Writing a Will – What do I need and how much does it cost?
• Creating Lasting Powers of Attorney – If I was incapacitated who can act on my behalf?
• Property Protection Trusts – Can these really save Care Home Fees?
• Pre-Paid Funeral Plans – With so many to choose from how do I decide which plan is best?

There is so much confusion on these vital areas of estate planning, that sometimes just a chat with an expert in the field can clear up misunderstanding and set out the way ahead, without all the legal jargon.

Steve Worsfold
Affiliate Member of the Society of Will Writers
Advising on Wills/Trusts/Probate/Powers of Attorney

Mobile: 07734 744886
Office: 01903 533681
Email: steve@sussexwillwriters.co.uk
Website: www.sussexwillwriters.co.uk

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Steve Worsfold has been an Affiliate Member of the Society for 15 years.