Inheritance Tax - a silver lining?
08 February 2008
The issue of Inheritance Tax is again high on the political agenda. But what is it all about? And why should we all care?
Inheritance tax affects many people in the UK – these days even more so as the threshold has not risen in line with house prices. Most people don’t know how much their estate is worth and therefore think they have nothing to worry about. However, it is a form of death duty that is affecting more and more of us and it requires careful tax planning if you don’t want to burden your family. While recent changes in the law are good news. It is still more important than ever to investigate how Inheritance Tax may affect your Will.
Currently the threshold for Inheritance Tax is £300,000; this is also known as the Nil Band Rate (NRB). The limit may be increased to £350,000 by 2010 This includes the value of your home as well as other assets. Anything above £300,000 is then charged at 40%. On 9 October 2007 the law changed to state that all surviving spouses and civil partners can transfer the NRB allowance unused, when their spouse or partner died, to their own estate to reduce the Inheritance Tax payable on their own death.
This means that under the new law, Inheritance Tax liability will be reduced for many people so increasing the amount inherited by family and friends. That’s why more and more people, once they have made sure that their loved ones are well provided for, are deciding to leave money to charity.
Last year The Children's Society received £7.7million from gifts in Wills. Without such gifts, large and small, much of the work we do just would not be possible. By including a gift to The Children's Society in your Will, you will be helping give children a better childhood.
We have produced a guide to help when you are thinking of making or changing your Will. It should give you all the information you need and answers any questions you may have.
Our making a Will booklet provides more information or call Aysha Mustafa on 020 7841 4472.