A recent analysis of national statistics has revealed that more estates in parts of Cheshire are falling liable to inheritance tax (“IHT”) bills than anywhere else outside of the South of England and Edinburgh. Cheshire East, which includes Alderley Edge, Wilmslow and Knutsford, tops the list of IHT hotspots in the region. Cheshire West also features highly.
IHT is payable when someone dies leaving an estate worth more than the current IHT threshold of £325,000 (married couples can use both their allowances so that they have £650,000 on the death of the second of them). The ‘estate’ includes any property, savings and other assets including cars and jewellery that they own on their death. IHT is charged on any assets over the threshold at 40% and must be paid out of the estate before the estate can be distributed to beneficiaries.
The South Manchester suburbs already dominate a list of the North West’s most expensive roads. These are already well-known exclusive hotspots with outstanding properties. People with above average homes are likely to be hit with a sizeable inheritance tax bill. For estates that don’t currently exceed the inheritance tax threshold, any increase in property prices could very well tip such an estate over the threshold.
The new additional allowance for the family home is being introduced gradually from April 2017 and applies to homes which are left to direct descendants. The allowance is tapered where the estate as a whole is more than £2 million, so that it does not apply to estates which have a value of more than £2.35 million.
Tax planning now is a good idea to help reduce the inheritance tax that will be payable on your estate on your death. At Myerson Solicitors LLP, we have extensive experience in assisting clients in inheritance tax planning matters to ensure that assets stay within the family. We also provide specialist advice relating to Wills, estates, probate, probate disputes, trusts and powers of attorney to clients in Manchester and Cheshire.
If you require advice on tax planning or any other area of Wills, Trusts and Probate law, please call one of our specialist solicitors on 0161 941 4000 or you can contact us via our enquiry form on the right of this page.