Be wary – Inheritance Tax receipts on the rise

According to His Majesty’s Revenue and Customs (HMRC), Inheritance Tax (IHT) revenue has increased by 7.2% compared to last year. This is worth noting, as there may have been cases where IHT could have been mitigated. It is important to consider the role of careful estate planning which could mitigate IHT and other taxes from your estate. Beware, if you do not have good estate planning your estate may be at risk of a costly IHT bill and you will leave less to the ones you love.

HMRC also stated that:

What’s more, HMRC further reported that overall tax receipts for April 2024, compared to the same period last year, were generally higher mainly from Income Tax, Capital Gains Tax (CGT) and National Insurance contributions (£3.5bn).

HMRC’s statistics are daunting, therefore it is important for you to seek quality advice when reviewing your estate. It is understandable that many individuals and families across the country are looking after their money given the current state of the UK economy. However, if you can invest in quality estate planning at the earliest possible opportunity, it might prove more valuable in the future for you and your loved ones.

Make sure to regularly review your Will

We all know having a Will in place is vitally important, but of equal importance is regularly reviewing your Will. It may be that you need to change your Will, or you may not, but reviewing will ensure you are kept up to date with any changes in taxation, the law, and that it still suits your personal circumstances.

Consequences of poor estate planning

Poor estate planning and an ‘out of date’ Will might lead to:

1. An IHT bill that could have been avoided;
2. A full or partial intestacy;
3. Will disputes, which can cause immense distress for families in a time of sensitivity.

This list is not exhaustive, but it highlights the clear-cut issues associated with unsatisfactory estate planning.

When to review your Will

The following points should cause you to consider reviewing and potentially changing your Will.

1. At least once per year. Make sure to have a check that all is in order and your Will meets your needs and wishes.
2. Relationships – have you got married or divorced? Have there been any new children or grandchildren?
3. Family – have you fallen out with people or lost contact and no longer wish for them to benefit under your Will?
4. Assets – has the value of your assets gone up and now put your estate potentially liable to IHT?
5. Retirement – have your circumstances changed following retirement?
6. Executors – are your Executors still alive, capable and living near by?
7. Death of Beneficiaries – are your Beneficiaries still alive?
8. Tax – is your Will as tax efficient as it could be?
9. Law – has the law changed which affects how you wish to leave your assets?

Cryptocurrency and digital assets

Poor estate planning can lead to the loss or mishandling of your digital assets upon death. A bespoke Will ensures they are properly administered and disposed of when you die. Inheriting digital assets can involve complex tax issues, making it vital to receive advice from a qualified professional familiar with digital assets and taxation. For more information surrounding cryptocurrency and digital assets, please read a previous blog: ‘The importance of keeping your digital assets safe.’

While it may seem daunting, it need not be, provided expert advice is taken at the earliest possible opportunity and keeping your Will and estate regularly reviewed.

How can Ellis Jones help?

If you are unsure or need help with estate planning, please contact our Wills, Trusts and Probate team for all related enquiries today on 01202 525333 or email richard.smith@ellisjones.co.uk. Alternatively, you can also contact our Wills, Trusts and Probate team by emailing willenquiries@ellisjones.co.uk.