Families are being warned about inheritance taxes and urged to plan “now more than ever”

Between April and July of this year, inheritance taxes receipts totaled £2.6 billion, an increase of £237 million or 10% from the previous year.

Inheritance taxes receipts totaled £2.6 billion

GB News reported that households are being urged to make plans now to lessen the risk of leaving loved ones with an unreasonably high inheritance taxes burden in the face of high inflation and tax allowance freezes.

Between April and July of this year, inheritance taxes receipts totaled £2.6 billion, an increase of £237 million or 10% from the previous year.

Households are being urged to make plans now to lessen the risk of leaving loved ones with an unreasonably high tax burden in the face of high inflation and tax allowance freezes.

According to Ben Alcock, a chartered financial planner at Continuum, inheritance taxes collections to HMRC are expected to increase this fiscal year, making it more important than ever for families to make appropriate plans for the future.

With the help of a financial advisor, you may ensure that your loved ones receive a larger share of your estate by navigating the complexities of inheritance tax planning without becoming bogged down in legalese.

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Practical techniques to maximize your assets

Some “practical” techniques to maximize your assets have been advised by the nation’s leading independent financial counseling firm, according to GB News:

1. Get talking

Communication is the first step in creating a successful inheritance plan for every family, according to Mr. Alcock.

He advised people to communicate with their spouse, kids, and stepchildren to learn about their worries and expectations as well as to identify any potential issues.

Items may have emotional as well as strictly financial significance for some family members, the professional financial planner noted.

You need to identify the items that are important to each family member, and you might need to reach some agreements, he advised. They can’t all have your diamond ring or watch.

Even if it requires extra effort, you might still need to talk about your goals with any children who don’t see you very often.

One option might be to distribute the riches evenly and give each beneficiary the sentimental item that best fits their situation.

2. Take stock

A person is advised to make an inventory of their financial assets, including their home and other property as well as investments, savings, and other significant belongings, after starting conversations with loved ones.

If you still have a spouse, they might be your top priority, but you also need to consider what will happen when they pass away, according to Mr. Alcock.

Possibly the largest obstacle is your house. It can be challenging to weigh its worth in relation to other assets, and handing it to only one beneficiary might cause animosity. One solution is to specify that it should be sold and the profits split. An alternative is a joint bequest that enables one beneficiary to acquire the shares of the others.

It’s crucial to consider any obligations or debts that can reduce the estate’s value.

“Knowing what you have now can be the basis for creating a fair inheritance plan that takes into account the needs of everyone who survives you,” the licensed financial planner stated.

As part of this evaluation, take a look at your life insurance. It can aid in ensuring that everyone inherits equally. If there are any discrepancies in the value of your other assets, the payoff from a life insurance policy can be shared among the beneficiaries to help even things out.

3. Watch out for the taxman

Checking the laws and exemptions may be worthwhile in order to lower a prospective inheritance tax liability by making donations several years before death, for example.

According to Mr. Alcock, inheritance tax may take a sizable percentage of your fortune (40 percent on anything over £325,000) and prevent your family members from enjoying the fruits of your labor.

If you seek professional counsel and make the necessary plans, you may be able to avoid or reduce inheritance tax.

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