It was Benjamin Franklin who said in 1789 “in this world nothing can be said to be certain, except death and taxes”. Recent research suggests that in the UK we are likely to be faced with more deaths and consequently more taxes over the next decade.
The Office of National Statistics project that deaths in the UK are likely to rise from approximately 566,000 in 2017 to 606,000 in 2027 – a rise of about 7% - and this is attributed mostly to the fact that we are an aging population.
Separately, the Centre for Economics and Business Research suggest that the total annual amount passing from one generation to the next will rise from £69 billion currently to a staggering £115 billion by 2027. This is likely to be a combination of lifetime gifts and inheritance and much of the increase is forecast to be as a result of rising property prices.
Passing wealth down to the next generation on death often results in a large Inheritance Tax liability (IHT). Lifetime gifts can also be subject to Capital Gains Tax. What seems clear is that unless there is a major shakeup in the way inheritances are taxed over the next 10 years – and this is not anticipated – then tax bills are likely to increase substantially.
If you think that you are likely to be affected by Inheritance Tax we are happy to talk about your personal situation and consider the options open to you.