For those with estates exceeding £600,000 there is a potential liability for an Inheritance Tax charge at 40% on the excess. Since it was established, Parker Kelly Financial Services has helped clients create strategies to reduce the impact of this tax, ensuring that as much of their estate as possible passes to their loved ones and not the taxman.

Many people feel that they do not need to worry about Inheritance Tax. It is indeed true that no liability arises if the Estate on death is less than the Nil Rate Band or where the Estate is left to an exempt beneficiary such as a surviving spouse or a charity. The Chancellor therefore often refers to the fact that only a small proportion of Estates pay Inheritance Tax but he does so in the knowledge that each year the amount of Inheritance Tax collected by the Inland Revenue has risen steadily by an average of 8.5% each year over the last 5 years.

As personal wealth and property values increase, more and more clients need to consider Estate Planning. The Chartered Institute of Taxation has predicted that around 2 million additional households could face the prospect of Inheritance Tax Liabilities over the next 10 years. Cash deposits, directly held shares and securities and PEPs/ISAs account for nearly one half of all personal financial assets in Estates where Inheritance Tax is payable.

This illustrates how rarely this type of asset is held in an Inheritance Tax protected environment. Inheritance Tax is a very penal tax when it bites, the rate charged on death is 40%.

For more information on the simple steps to avoid unnecessary tax on death and to ensure that assets remain in the family, contact Parker Kelly Financial Services.