As house prices continue to rise and more people lay themselves susceptible to IHT, it is no wonder the Treasury projects it will take a record £3.6 billion in 2006/07, compared to £2.9 billion in 2004/05.
Bradford & Bingley has produced the guide, written by national finance journalist Liz Philips, to help UK residents understand the various ways they can help manage any IHT bill amounting to 40% on assets exceeding £300,000 (the first £300,000 is tax free).
Bradford & Bingley’s IHT Guide, explains that a person’s estate does not just include the value of someone’s home, but also any other property they may have in the UK or abroad; any cars, savings, valuable collectibles or belongings.
Even for those confident that their property is a good £50,000 or so short of the £300,000 threshold, it is vital they consider how much the rest of their estate is worth and what they plan to do if they are over or near their £300,000 allowance.
Bradford & Bingley’s guide, available in branches nationwide, explains how IHT can be calculated; who is exempt from paying IHT, for example spouses; what IHT allowance people are entitled to each year; and how giving to certain organisations or within certain time frames can enable tax relief.
Ways of cutting down your IHT bill can include, setting up trusts, making gifts to friends and family, leaving money to a charity and drawing up a will to specify how you would like your estate to be distributed.
Andrew Stead, head of wealth at Bradford & Bingley, commented: “Planning what will happen to your estate sounds like a depressing thought, but what is even more depressing is the amount of tax your estate could be subject to if you don’t start planning now. We hope our guide helps people start planning that process, allowing them to divide their estate as they see fit, by not including the tax man.”
In conjunction with the IHT Guide, Bradford & Bingley has also launched an IHT calculator, enabling people to calculate exactly how much they could be taxed.
