Act now to take advantage of inheritance tax breaks

23 March 2005

The increased threshold on inheritance tax in Gordon Brown’s Budget is good news but failure to make a tax efficient Will could result in as much as £120,000 being paid unnecessarily, says solicitor Harvey Barrett, head of private client services at Furley Page law firm.

The Chancellor raised the threshold to £275,000 with further increases to come up to £300,000 by tax year 2007/8. However, carefully drawn tax efficient Wills can result in massive tax savings.

Mr Barrett, a partner at Furley Page, said: “If you have inherited assets in the last few years, it may be possible for you to redirect your inheritance into a tax efficient trust fund so that it is not taxed as part of your estate when you die. This can be achieved by a carefully worded Deed of Variation – but you will have to act within two years of your benefactor’s death.

“The advantage of this is your inheritance will escape inheritance tax when you die and yet you can still benefit from your inheritance tax during your lifetime. A legitimate eating of your cake and having it too!”

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