Inheritance Tax is on the rise – but it’s not just about property.


The property market makes a lot of headlines – which is hardly surprising, given that of all the asset classes it is the one that clients will be tangibly aware of every single night they sleep under their own roof. How often have advisers heard clients say “My house is my retirement fund,”, or “My house is my pension pot,” leaving that uneasy feeling that clients are too dependent on a single asset class, perhaps not aware enough of the reasons to diversify.

Property may too often be considered the primary reason for an inheritance tax (IHT) bill and up to now has now been allocated its own Nil Rate Band – an appealing headline, but somewhat masking the additional level of complexity that it brings with it.

Looking further into the data on IHT suggests that it is not just house price inflation that has been pushing up IHT bills in recent years.

It has been widely reported that IHT receipts have been steadily increasing. In April 2017, the Residence Nil Rate Band was introduced, with its main objective being to ‘reduce the burden of IHT for most families, by making it easier to pass on the family home to direct descendants without a tax charge’

However, almost half of inheritance tax was charged on assets that were not property – such as securities, cash & insurance.

Whilst the amount of tax being raised is on the rise, there are many factors contributing to this increase, with property being only one factor. 

Inheritance tax can be the biggest tax bill a person ever generates. Although property can be a significant contributing factor, and in some cases the most significant, clients need to be aware that other assets also need consideration.

Planning for IHT around a family home can be difficult, whereas holding other assets in trust is more straightforward and also provides a means to avoid lengthy probate delays.

Contact us today to see how we can assist with your client’s inheritance tax planning solutions.