Currently around £4bn is raised from IHT and around 4.5 million people pay it, however, as the UK’s demographics and wealth map changes, the receipts will increase substantially, providing a valuable extra income for the Government when its coffers are bare.
Moore Blatch warns brokers to continue to push IHT planning even if their clients have seen the value of their property and estates decrease. With the Gift Inter Vivos term lasting seven years, their clients’ financial position could look significantly different in the future. However, whilst the economy may be better in seven years and the individual’s estate has recovered the tail in terms of the Government clawing back its borrowing may last for years to come.
Andy Kirby, senior trusts and tax manager, Moore Blatch said: “In times of recession many people are reluctant to make financial decisions and this is especially true of today’s elderly population, most of who tend to be more risk adverse. However, by delaying their IHT planning they are missing an opportunity to consolidate their taxable capital at a lower total value and there is a risk that by delaying planning now, they may live beyond the seven years Gift Inter Vivos period.”
