Inheritance Tax

Inheritance tax has suddenly become one of the hottest issues in the financial and political world. A decade ago it was hardly ever mentioned. Today no newspaper seems complete without a ‘Stamp Out The Tax’ campaign and reporters regularly deliver mail bags full of angry letters to Number 10 trying to persuade the Government to reform the rules.



Meanwhile experts say inheritance tax remains one of the least understood parts of the financial system. Lots of people are concerned about how the tax might affect them or their families but very few of us know how bad it might be or what they need to do to avoid it. That’s what this independently researched and written website aims to put right. It goes through all the key issues about the tax and offers clear and simple ways to keep bills to a minimum. Here’s all you need to know about what used to be called ‘the death tax’.

Latest News

Budget let first-timers down, says NAEA

The government still needs to do more to help first-time buyers, according to the chief executive of the National Association of Estate Agents (NAEA).

Peter Bolton King, commenting on yesterday's Budget speech, said the extension of the Open Market HomeBuy scheme to lower-income households was "a positive move".

However, he expressed his disappointment at the lack of more help for first-time buyers.

"Ideally, the shared equity scheme would be complimented by a range of other measures, such as zero stamp duty for first-time buyers," he added.

Mr Bolton King said stamp duty remains "a serious financial burden" for those struggling to get onto the property ladder in the UK.

"In order to really help first-timers, we urge the government to exempt them from paying stamp duty altogether," he added.

Halifax's group economist Tim Crawford commented that the bank would have liked to have seen the stamp duty threshold adjusted in yesterday's Budget.

"The thresholds at which inheritance tax and particularly the higher stamp duty bands are levied have lagged well behind the increase in house prices over the past decade," he said.

Brits hope inheritance will fund pensions

The number of people relying on receiving an inheritance in order to fund their retirement has seen a "dramatic increase", according to a new report.

Brewin Dolphin's third annual National Inheritance Survey found that 43 per cent of adults who are expecting an inheritance are relying on it to fund their retirement, up from 27 per cent in 2006.

Meanwhile, over a quarter (27 per cent) of adults aged between 55 and 64 and therefore approaching retirement, say that they will be using their inheritance to pay off debt.

While 29 per cent of those expecting an inheritance from their parents think that they will receive it before the age of 50, the fact is that most people are bequeathed inheritances in their 50s and 60s as life expectancy continues to increase, the portfolio manager said.

"Banking on an inheritance to pay off a mortgage or other debts and even fund their retirement is in many cases naive but reflects the collapse in pension expectations and the rise in personal debt," commented director of corporate affairs at Brewin Dolphin Securities, Charlotte Black.

It is vital that people take action now and seek assistance from a professional financial adviser, she added.

The research comes as figures from Yorkshire Bank show that 27 per cent of parents hope their children will help them out financially when they reach retirement.

Retirement income tops Britons' money worries

Pensions are Britons' biggest financial headache, a new survey of financial advisers has shown.

Retirement planning and retirement income topped a list of consumers' main money worries, with 54 per cent of financial advisers saying that this is the key concern for clients.

More specifically, 40 per cent of advisers said that their clients' biggest worry was not having saved enough for retirement, with some clients having no idea where their retirement income is going to come from, the research by Prudential revealed.

However, just four per cent of advisers said that their clients had no pension, which suggests that people are taking messages about retirement on board, the financial services company said.

After retirement planning and finance, the next most pressing concern for Britons was inheritance tax (IHT) planning, with 16 per cent of advisers saying that clients are trying to negate the impact of the tax after witnessing increasing house prices and a relatively low IHT threshold this year.

Ali Crossley, director of lifetime mortgages at Prudential UK, said: "Retirement planning is clearly still a core focus and people are increasingly realising that they may not have saved enough to support them when they retire.

"It is important to note, however, that it's never too late to plan for retirement, though the earlier people start the more time they have got to save."

© See Terms and Conditions