INHERITANCE TAX PLANNING

With house values in most of the UK showing two or even three fold increases in value over the last ten years, Inheritance Tax has become a major issue for most households

The 'nil rate band' for an individual in the 2010/11 tax year is GBP 325,000 and this has only increased in line with RPI, not wages or house price inflation which would be a more realistic measure.

As a consequence of this most households will have an Inheritance Tax bill as assets pass down to future generations, even though many tax advisers describe this as a 'voluntary tax' that can be avoided with careful advanced planning.

With the careful use of Trusts to wrap life assurance and pension scheme death benefits, or even privately owned assets like a second home, it is possible to mitigate a significant amount of your potential Inheritance Tax liability.

Please note that the FSA does not regulate some forms of Inheritance Tax and Trust planning.