Brits need to re-evaluate inheritance tax positions
While people are becoming increasingly aware of inheritance tax issues, many more still fail to keep on top of their finances in this respect, experts state
With people becoming increasingly financially savvy, partly due to the rise in money-themed television programmes and a boom in the number of financial advisors, the financial implications of death are no longer being ignored.
Rather than just sorting out funeral arrangements or writing out a will, Britons are increasingly sorting out their finances when they are alive, both as this will save friends and relatives considerable grief and effort, but also as they may be able to avoid paying inheritance tax on anything they pass on to others.
Financial advisors have now reported that giving away money, either to charity or to family and friends, is growing in popularity.
Ian Wilson, director of Forum Wealth, notes: "Giving it away - not necessarily to charity - but giving it away before we die, yes. First generation wealth are becoming more aware that the likes of second and third generation wealth have always done this."
The comments come soon after it was revealed that the founder of the Body Shop, Anita Roddick, left her daughters no inheritance, but rather left £51 million to charity.
According to Mr Wilson, even though inheritance tax wouldn't have been charged on Mrs Roddick's donation, she was wise to make the decision of where her money was going to go while she was alive, an example money experts advise all adults to follow.
Commenting on the steps people should take to ensure that they manage to negotiate the inheritance tax issue successfully, he noted that simply writing out a will and then putting it in a safe and forgetting about it is not enough.
Instead, people need to "constantly re-evaluate" their position.
"It's about getting someone to do the strategy and it's realising that once you've got that strategy in place it's never one thing that covers all. You constantly have to evolve it because your situation can evolve in a different manner than you predicted. You need to constantly be evaluating it just to make sure it's still optimum."
As well as keeping on top of any changes in the law, for example to inheritance tax thresholds, people should also be aware of any changes to the value of their homes or other possessions, ideally seeking professional and impartial advice at every step.
