Blandy & Blandy highlight the importance of lifetime tax planning

By Sam Pither

18 August 2022

Share

The Business Magazine article image for: Blandy & Blandy highlight the importance of lifetime tax planning

According to Louise Nelson, senior associate in Thames Valley law firm Blandy & Blandy’s Wills, Probate, Tax and Trusts Team, the recently released inheritance tax (IHT) figures for the past year highlight the importance of lifetime tax planning.

The reminder comes following HMRC’s announcement that they collected an extra £729 million over the past year which is the largest year-on-year increase since 2017.

The total collected by HMRC on inheritance tax for 21/22 was £6.1 billion, a rise of 14 per cent compared to the previous year. By 2026, the Office for Budget Responsibility expects this to rise to £8.3 billion.

Part of this is down to the fact that the nil band rate (of £325,000) has remained unchanged since 2009, with the next review not planned until 2026. In this time, the average property price has risen by £140,129. This inflation means more and more estates are falling outside the IHT tax free band.

Blandy and Blandy have suggested a number of different ways that the inheritance tax bill may be reduced, including by pointing out that IHT is not payable on property going to a widow, widower or charitable trust.

Another suggested method is to consider tax efficient investments which fall outside the scope of IHT if they benefit from business relief. Finally, planning ahead by making use of the annual allowance of financial gifts may help to reduce the size of an estate.

By Sam Pither

Sam is the Regional Editor of Biz News, responsible for both Hampshire and Dorset.

A new recruit to journalism, Sam started writing for the Business Magazine as a freelancer in May of 2022 after completing his degree in English at University College London. His passion for local businesses and ability to tell a story soon caught the attention of the publication’s management team and have led to his meteoric rise.

Sam, who lives in central Reading, takes a particular interest in technology, gaming and food and drink, having been a chef before starting his degree.