Inheritance tax Scotland. The rising value of homes has contributed to the government receiving a record £7.1Bn revenue from Inheritance tax the Treasury revealed today (25th April 2023). This is an increase of £1Bn on the last year.
The increase take in Inheritance tax was the result of fiscal drag and rising asset values. Fiscal drag is where tax thresholds remain static whilst asset values increase. The threshold for Inheritance tax is £325,000. This threshold has been static since 2009. With the passage of time this means that more and more estates are subject to Inheritance tax of 40%.
There are legitimate ways of mitigating Inheritance tax to preserve your hard-earned cash for the next generation, but you must plan for this well in advance.
For example, the recent rise in the lifetime pension allowance provides an opportunity to increase your pension whilst sheltering your estate from Inheritance tax.
At Oracle Law we focus on inheritance tax in Scotland. We can provide you with Estate planning advice which will allow you to make informed decisions about your money and how to pass it onto the next generation.
Many people think that inheritance tax (IHT) is only of relevance to very wealthy individuals. This is not necessarily the case as more and more people own their home. Property prices are now rising again and so, therefore, is the size of a person’s estate. Individual’s financial circumstances can change dramatically over the years particularly those with business interests. Learn more about inheritance tax here.