Estate planning is the big opportunity of 2023

by | Jan 24, 2023

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Estate planning is something too many families put off. But recent events have made inheritance tax and providing for loved ones a priority.

Rising inflation has combined with frozen inheritance tax allowances, impacting families across the UK.

A record £3.5 billion of inheritance tax was paid between April and September 2022.[1]

 

The nil-rate band has been frozen for more than a decade. This allowance, and the residence nil-rate band, are fixed until at least 2026. 

PwC calculate that if the £325,000 nil-rate band had instead risen in line with inflation every year since 2009, it would stand at £478,078.[2] This would have allowed a further £153,078 to be left to loved ones tax free.

Meanwhile, inflation reached a 40-year high in 2022[3] The value of estates has skyrocketed, with one in 42 homes now worth more than £1 million[4]

 

It’s worth remembering that Business Relief (BR) could have a role in those conversations. BR is a longstanding relief from inheritance tax relief that’s been supported by successive governments because it contributes to the UK’s growth ambitions.

Writing BR cases

BR offers three significant advantages. Speed, access, and the potential for growth. And these advantages could be invaluable to you and your clients over the coming years.

 

But how confident are you in recommending BR-qualifying investments?

In this webinar from Octopus Investments: 

  • Why inheritance tax receipts are climbing and the importance of BR.
  • A panel of financial advisers discuss how they approach writing BR cases.
  • Special guest Mark Greenwood, Director of Compliance Services at SimplyBiz, gives practical tips on risk, suitability, and Consumer Duty.
  • How to choose the right BR investment for a client.

Register now >>

 

Some key risks to keep in mind

  • The value of an investment in the Octopus Inheritance Tax Service can fall as well as rise. Investors may not get back the full amount they invest.
  • Tax treatment depends on individual circumstances and could change in the future.
  • Tax relief depends on portfolio companies maintaining their qualifying status.

[1] “Four safe ways to cut inheritance tax”, The Sunday Times, 6 November 2022

[2] https://www.express.co.uk/finance/personalfinance/1593045/inheritance-tax-IHT-threshold-325-000-Chancellor-Rishi-Sunak-stealth-tax-HMRC

 

[3] https://www.ftadviser.com/investments/2022/03/23/scale-of-the-uk-inflation-shock-revealed/

[4] https://www.thetimes.co.uk/article/huge-rise-in-1-million-homes-across-the-uk-mcrrs7ttl


 

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