More estates fall into the inheritance tax net

The good news: the tax nil rate band – the amount of your estate that is inheritance tax (IHT) free – is to rise to £350,000. The bad news: this change happens on 6 April 2010. The nil rate band is £300,000 in 2007/08, £312,000 in 2008/09 and £325,000 in 2009/10.

Since Gordon Brown became Chancellor in May 1997, average house prices have risen by over 200% (as of March 2007) and the nil rate band has increased by 39.5%.*

All is not lost if you are concerned about inheritance tax on an estate. There is a range of methods that can help you mitigate the impact of IHT. The most basic is to make sure your will is up to date. A properly drafted will could save your dependants up to £120,000.

IHT planning should be integrated into your overall financial planning: why minimise IHT if you suffer tax-efficient poverty as a result?

The FSA does not typically regulate IHT planning.

* Source: Nationwide Building Society

In this edition

PLEASE REMEMBER: This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The newsletter represents our understanding of law and HM Revenue & Customs practice as at May 2007.