Inheritance Tax Threshold Frozen Until 2030

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Post on Oct 30, 2024

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Inheritance Tax Freeze: What Does It Mean for You?

The government has decided to freeze the Inheritance Tax (IHT) threshold until 2030. This means that the amount of money you can inherit without paying IHT will remain the same for the next 7 years.

But what does this actually mean for you and your family? Let's break it down:

The IHT Threshold: A Quick Refresher

The IHT threshold is the amount of money you can inherit before tax kicks in. This amount is currently £325,000 per person. So, if you inherit more than this amount, your beneficiaries might have to pay IHT.

The Freeze: What's the Big Deal?

The freeze means that the IHT threshold won't increase in line with inflation. So, the value of the threshold will actually decrease over time. This is a big deal because it means that more people will be caught by IHT in the future.

Who's Affected by the Freeze?

The freeze will affect everyone who plans to inherit a large sum of money. This includes:

• People who are inheriting a large estate from a loved one.
• People who are planning to leave a large estate to their children or grandchildren.
• People who are concerned about the potential impact of IHT on their family.

How Can You Mitigate the Impact of the Freeze?

There are a few things you can do to mitigate the impact of the IHT freeze.

• Consider making gifts during your lifetime. Giving away some of your wealth to your loved ones now can help reduce the size of your estate when you pass away.
• Take advantage of the IHT nil rate band. This is a separate allowance that allows you to transfer some of your wealth tax-free to your direct descendants.
• Seek professional advice. A financial advisor can help you understand the complexities of IHT and create a plan to minimize your tax liability.

A Bit of a Downer, Right?

The IHT freeze isn't great news for many people. It's important to be aware of its impact and plan accordingly. Take some time to consider your options and talk to a financial advisor to see how the freeze will impact your situation.