UK wastes 1.1 billion through poor inheritance tax planning?
- Two-thirds of UK adults have no Will in place
- November's WillAid* campaign offers chance to set your record straight
People in the UK are paying 1.1 billion more inheritance tax than they have to, according to research** from IFA Promotion, the organisation promoting the benefits of independent financial advice.
"This tax could easily be avoided with a little financial planning to ensure that your will reflects your current wishes," said David Elms of IFA Promotion. "Alarmingly, the investigation found that two-thirds of UK adults have made no will at all, and WillAid 2000 gives people an ideal opportunity to set their records straight and benefit charities in the process."
IFA Promotion's research shows that this year alone more than 1.1 million people will share inheritance totaling 25 billion, with 1.4 billion going straight to the taxman. Also approximately 53,000 people have died 'intestate' this year (with estates worth more than 5,000), ie they have made no provision for the division of their estates among family, friends or favourite charities. Not only could the absence of a Will delay the distribution of assets, but in many cases, such as unmarried couples, it could mean that those closest to the deceased person may receive nothing - worse still, if the state cannot trace anyone to inherit, then the taxman gets the lot.
Elms points out, "With soaring property values, especially in the South East of England, many people will find that their assets exceed the 234,000 threshold for inheritance tax. The message is simple - inheritance planning is not just for the rich. If you want to make sure that as much of your estate as possible goes to the people or charities of your choice, you need to plan ahead for your inheritance."
Planning in advance has always been the key to effective estate planning. With the help of an IFA it may well be possible to pass on all of your assets free of tax to the next generation. There are a number of areas to consider and an IFA can advise which would apply to you, for example:
- A life assurance policy can be taken out under trust to pay-off the IHT liability when due.
- Any UK citizen can give away up to 3,000 to an individual each year as well as 250 to any number of people free of tax.
- Gifts to charities, political parties and for the national or public benefit are exempt from IHT and so too are certain wedding gifts.
- Gifts of any size are potentially exempt if the donor survives for seven years or more.
- Once in place, your will should be reviewed regularly, particularly in light of major life changes such as remarriage.
Elms concluded: "If you're planning how to leave your assets, help from an independent financial adviser could save your estate - and your heirs - a great deal of money."
* The WillAid campaign, backed by 7 major charities - call 01460 238 026 for details
** Wasted Tax 2000 conducted by independent research agency, RAKM - 01737 773 497
For details of 3 local IFAs or to request a free copy of IFA Promotion's guide to inheritance planning, call the hotline on 0117 971 1177 or visit the website at www.unbiased.co.uk.
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For further information, please contact:
| David Elms | or | Richard Winder / |
| Marketing Director | Pippa Russell | |
| Independent Financial Adviser | Lansons Communications | |
| Promotion | Tel: 020 7490 8828 | |
| Tel: 020 7833 3131 |
1. Made/not made a Will by demographic sub group, 1999
Group | Made a WILL (%) | Not Made A WILL (%) |
All | 34.0 | 66.0 |
Men | 33.3 | 66.7 |
Women | 34.6 | 65.4 |
AB | 51.5 | 48.5 |
C1 | 35.9 | 64.1 |
C2 | 27.2 | 72.8 |
D | 21.7 | 78.3 |
E | 26.3 | 73.7 |
15-19 | 1.6 | 98.4 |
20-24 | 3.8 | 96.2 |
25-34 | 13.7 | 86.3 |
35-44 | 27.0 | 73.0 |
45-54 | 41.5 | 58.5 |
55-64 | 56.1 | 43.9 |
65+ | 63.3 | 36.7 |
Taken from TGI Survey of 25,000 adults.
Notes to Editors
1. Independent Financial Adviser Promotion
Independent Financial Adviser Promotion Ltd. was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents over 9,000 registered individual independent financial advisers across the UK and is sponsored by 32 leading financial institutions..
2. Independent Financial Adviser Promotion. - SponsorsBarclays Global Investors Funds | NPI |
BUPA | Prudential Intermediary Division |
Canada Life | Scottish Amicable Life Plc |
Clerical Medical Investment Group | Scottish Equitable Plc |
Dresdner RCM Funds (UK) Ltd. | Scottish Life Assurance Company |
Eagle Star | Scottish Mutual Assurance Plc |
Family Assurance Friendly Society Ltd | Scottish Provident Institution |
Friends Provident | Scottish Widows plc |
Hill Samuel Asset Management Group | Standard Life Assurance Company |
INVESCO Fund Managers Ltd | Sun Life |
Investec Asset Management | Swiss Life (UK) plc |
Legal & General | The Skandia Group of Companies |
Mercury Asset Management | Tunbridge Wells Equitable Friendly Society |
National Mutual | UNUM Ltd |
National Savings | Winterthur Life UK Ltd |
Norwich Union Life | Zurich Life Assurance Company |