01/03/2007
Avoid the Inheritance Tax Trap!
It is now estimated that 4 in 10 families in the UK over the next few years, will have to pay Inheritance Tax (IHT).
If your assets are worth over the current IHT threshold of £285,000 your estate will be liable to tax at 40% on everything over this amount. The IHT threshold has not been raised in line with the rising property prices. With the average property price in England and Wales now quoted as being £224,802 you do not have to be rich to pay IHT.
The £285,000 threshold includes:-
·Your savings and investments;
·your home;
·your car;
·your furniture;
·the proceeds of any life insurance policy.
With sensible tax planning and a properly drafted will, IHT can be avoided or significantly reduced. However, only one in three people make a will. As a result it is estimated that £1.3 billion will be wasted this year due to poor inheritance tax planning.
Apart from Inheritance Tax planning there are many reasons why should not delay in making or updating your will. If you have not made a will then you cannot control who will inherit what you own after your death, your husband or wife may not receive everything and unmarried partners, friends and charities will definitely receive nothing. If you have young children then you can also appoint guardians in your will to look after them until they are 18. A will allows you to give clear directions on how to deal with your affairs after your death. If you leave no will you may cause your family to suffer significant hardship and to have to dispute your estate, which is time consuming and very expensive.
It is therefore extremely important that you take professional advice and make a properly drafted will and that you regularly review it to keep it updated.
If you wish to contact Watkins and Gunn to make a will, please contact the Probate Department on 01495 768936 or visit our website at www.watkinsandgunn.co.uk where you can complete a will questionnaire and submit it to us on-line.
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