How to Reduce Your IHT Bill

FUTURE PROOF: Even those who believe they have moderate wealth levels may still need to take action to minimise inheritance tax

Tilney 8 March, 2018 | 3:49PM
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This article is part of Morningstar's "Perspectives" series, written by third-party contributors. Here, Ian Dyall, estate planning expert at Tilney explains how not to get caught out by inheritance tax.

While changes to Inheritance Tax allowances have helped many families in recent years, plenty are still unnecessarily caught out by this tax. Even those who believe they have moderate wealth levels may still need to take action to minimise inheritance tax, particularly if they own property and have savings.

The nil rate band – a personal tax-free allowance on the value of an estate – was set at £325,000 in 2009 and will remain frozen until April 2021. This is despite the resurgence of property prices across the UK – for example, in London, the average house price is £496,000, well above the nil-rate threshold. An additional Residence Nil Rate Band of £100,000 was introduced last year which will rise to £175,000 over the next 3 tax years, but there are a number of qualifying rules and many people will not be able to fully benefit from it.

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About Author

Tilney  provides personal financial advice and investment management services to private individuals, families and trustees