Many people think it is only the rich that are affected by inheritance tax, but, says Investment specialist Edward Jones, it can affect anyone.
With house prices continuing to rise, an inheritance tax liability is becoming an increasing possibility for more people than ever before.
And if someone dies without making a Will, things become very complicated because there is no legal benefactor of that person’s estate which can result in a significant share of the value of the property going to state, and this is on top of any inheritance tax due.
“Many people don’t realise how much their estate can amount to once everything is taken into account – house, car, possessions, business interests, savings, shares, jewellery and so on,” says Brian Potter, a Financial Adviser and Stockbroker with Edward Jones.
“It’s very easy for an estate to be worth a lot more than the current £300,000 inheritance tax threshold, with tax charged at 40% on everything above this limit.
“So, for example, an estate worth £500,000 would leave a tax liability on the balance of £200,000, meaning £80,000 would have to be paid before the estate was released to beneficiaries.
“It’s also wrong to assume on death everything passes to ones nearest and dearest. This is often simply not the case. But interests can easily be safeguarded by making a Will and taking advice. It is simple, inexpensive and can also help limit any inheritance tax liability.”
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