A manager for an Oxford-based tax efficient investment firm has predicted an increase in families seeking advice and help to avoid being caught out by the ongoing rise in inheritance tax (IHT) payments, with escalating house prices.
Simon Ruthers of Oxford Capital said: “If you are a homeowner and you own an average detached house that is going to absorb the nil rate band. If you have assets above your main residence, then you have got an inheritance tax problem. Any family only pays a significant IHT bill once. Those families who have paid IHT at some point are very aware of the issues.”
He also expressed scepticism about relying on pensions as an estate planning tool, following the Government’s decision to scrap the 55% “death tax”.
Mr Ruthers said people need to be mindful that pensions are useful in this respect, but there are limitations on what you can do with them. “One of the things you cannot do is chuck a lot of money into your pension when you are 85 because you haven’t got any relevant earnings.”
Do you agree with his comments?
The Office for Budget Responsibility has recently forecast the numbers of deaths subject to inheritance tax will more than double in the period between 2013 to 2014 and 2018 to 2019, reaching 54,500 or 10% of deaths liable.
It was revealed in October 2015, using data disclosed on tax receipts which showed figures from 2012 to 2013, that inheritance tax was paid on around 17,900 estates totalling £3.05 billion. This was a 15% increase on the £2.65 billion total paid in the previous tax year.
What are your predictions for 2016 in terms of IHT advice uptake? Do you see demand and billing continuing to increase, or are there other factors that need to be considered?
Please let us know your thoughts on this matter in the comment section below.
