As the election season approaches, tax policies become a hot topic of discussion. Inheritance tax (IHT) is one such tax that often comes under scrutiny. Despite its unpopularity, it is important to understand what it is and how it affects individuals and families.
Contrary to popular belief, inheritance tax affects only a small percentage of estates. In the tax year 2020-2021, less than 4% of all estates in England and Wales paid inheritance tax. Additionally, the revenue generated from IHT accounts for a small fraction of all tax receipts and national income.
Inheritance tax primarily impacts the wealthy, and with proper financial planning and advice, it is possible to reduce or even eliminate IHT liabilities. It is important to regularly review financial affairs and wills to ensure optimal estate planning.
By understanding how IHT will affect your estate and proactively managing your finances, you can minimise its impact on your loved ones. Seeking professional advice can provide valuable insights and strategies for effective estate planning.
In conclusion, while IHT may be a contentious topic, it is important to separate fact from fiction. With proper planning and advice, IHT liabilities can be effectively managed, ensuring that your assets are preserved for future generations. If you have any questions or concerns about inheritance tax planning, feel free to reach out to James Winfield for further discussion.
