Inheritance tax bills can be managed by the effective use of Wills, which can ensure assets are passed onto the correct beneficiaries and that the correct amounts are paid. Many experts in the estate planning field encourage families to create Wills as soon as possible and, in the UK, March is designated to be ‘Free Wills Month’, an initiative backed by a number of charities. Research from Which? found the number of people who made Wills during the first lockdown in early 2020 surged, with a 682% increase seen in April when compared to the previous year. Changing relationship trends are also set to impact on IHT plans and unfortunately, the Government is somewhat lagging behind: “Fewer people are getting married, with ONS finding that cohabiting couple families are the fastest-growing family type. Sadly, the law hasn’t caught up with this fact, meaning that unmarried couples are largely unprotected if one should die. Unlike for married couples or those in a civil partnership, there is no legal right to property not jointly owned. If you have children together then this could mean that your partner risks not being able to stay in the family home or have enough money to bring up your children. To make sure they are protected, it’s crucial that you have a Will in place expressing your wishes regarding children and assets. IHT bills can also be reduced or avoided all together if certain actions are taken. Putting assets, such as cash, property, or investments, into a Trust can mean they’re no longer part of your estate for inheritance tax purposes. However, the rules around Trusts are complicated and have changed over the years; for example, you could be taxed as you pay in or take money out, so make sure to seek advice if you are considering this option.

Please Note: Past performance is not a reliable guide to the future. The value of investments and the income from them can go down as well as up. The value of tax reliefs depend upon individual circumstances and tax rules may change. The FCA does not regulate tax advice. This newsletter is provided strictly for general consideration only and is based on our understanding of law and HM Revenue & Customs practice as of March 2021 and the contents of the Finance Bill. No action must be taken or refrained from based on its contents alone. Accordingly, no responsibility can be assumed for any loss occasioned in connection with the content hereof and any such action or inaction. Professional advice is necessary for every case.