Inheritance tax ignorance leaving Londoners with unexpected bills
- Credit: PA Wire/Press Association Images
More than half of London residents exposed to inheritance tax risk leaving their loved ones with unexpected tax bills because they are not aware of its laws.
According to a new report conducted by Close Brothers Assett Management, as many as 62% of Londoners liable for inheritance tax do not know the correct tax threshold, with a further 32% overestimating it.
With the threshold currently frozen at £325,000 and with assets such as property rising in value, the number of Britons set to fall into the threshold is forecast to double from 21,000 in 2012 to 42,000 by 2016.
The total amount paid in inheritance is subsequently expected to rise by 60% by 2019.
Tax saving measures can help affluent Londoners ease the financial burden, though 18% were unaware of the seven year rule, which allows gifts made to individuals to remain exempt from inheritance tax as long as the person lives for seven years after making the gift.
You may also want to watch:
There was significantly less awareness of the Business Property Relief, with nearly half (46%) unaware of this tax-saving measure
Patrick Haines, Regional Head of Advice at Close Brothers Asset Management, said: “When it comes to personal finances, those looking to pass on their wealth cannot let inheritance fall under the radar. It can only be ignored for so long.
- 1 Teenager dies after stabbing in Archway
- 2 Man detained after series of attacks on women in Hampstead
- 3 Pictures: Fun for families as the snow arrives on Hampstead Heath
- 4 The snow is beautiful and fun - but during Covid we must stick to the rules
- 5 Arsenal boss Mikel Arteta expecting another tough game against Southampton
- 6 South Hampstead neighbours mourn tree felled by Storm Christoph
- 7 Buyers claim luxury flats are 'nightmare' construction site
- 8 Women attacked by wrench-wielding man in Hampstead
- 9 Haverstock Hill cycle lanes order scrapped by Camden Council
- 10 Covid, O2, police, village square, Notting Hill Genesis and the Suburb
“With £75bn5 being inherited in the UK every two years, large sums of family wealth are left unnecessarily exposed to tax.
“A combination of planning inertia and a general lack of awareness is to blame, but it is crucial that those who will see their estates subject to the tax understand their liability.”