Britons are now being urged to avoid making a significant mistake that many people fall foul of regarding inheritance tax (IHT).
Among the issues people must be mindful of is understanding the thresholds involved when considering bequeathing their estate to beneficiaries, as some Britons may not be impacted by the mandatory government levy.
Although IHT receipts have soared recently, a substantial proportion of the UK population has stayed unaffected by the levy. For example, in the tax year 2020 to 2021, statistics from Her Majesty’s Revenue and Customs (HMRC) state that less than 4% of UK estates paid IHT.
Often referred to as the nation’s most disliked tax, IHT is typically charged on any part of a person’s estate above a £325,000 threshold. However, it is possible to raise the threshold when a house is given to a child or grandchild. This includes adopted children and stepchildren.
For a clearer picture of IHT and the current thresholds, concerned Britons often reach out to experts in financial advice across Shropshire, Oxfordshire and other counties.
Mitigating the amount of inheritance tax due is often high on the list of Britons financial objectives, and although many ways exist to reduce tax liability, these measures must be performed correctly. Otherwise, mistakes can impact how effective tax planning is, and leave estates open to an unanticipated IHT bill.
A lack of understanding about thresholds is the biggest mistake most consumers make, with some fretting about a bill they will never face, and others entirely unprepared for the bill their departure will trigger.
