/*# sourceURL=/css/ampdoc.css*/[hidden]{display:none!important}.i-amphtml-e lement{display:inline-block}.i-amphtml-blurry-placeholder{transition:op acity 0.3s cubic-bezier(0.0,0.0,0.2,1)!important;pointer-events:none}[layout=nodis play]:not(.i-amphtml-element){display:none!important}.i-amphtml-layout- fixed,[layout=fixed][width][height]:not(.i-amphtml-layout-fixed){displa y:inline-block;position:relative}.i-amphtml-layout-responsive,[layout=r esponsive][width][height]:not(.i-amphtml-layout-responsive),[width][hei ght][heights]:not([layout]):not(.i-amphtml-layout-responsive),[width][h eight][sizes]:not(img):not([layout]):not(.i-amphtml-layout-responsive){ display:block;position:relative}.i-amphtml-layout-intrinsic,[layout=int rinsic][width][height]:not(.i-amphtml-layout-intrinsic){display:inline- block;position:relative;max-width:100%}.i-amphtml-layout-intrinsic .i-amphtml-sizer{max-width:100%}.i-amphtml-intrinsic-sizer{max-width:10 0%;display:block!important}.i-amphtml-layout-container,.i-amphtml-layou t-fixed-height,[layout=container],[layout=fixed-height][height]:not(.i- amphtml-layout-fixed-height){display:block;position:relative}.i-amphtml -layout-fill,.i-amphtml-layout-fill.i-amphtml-notbuilt,[layout=fill]:no t(.i-amphtml-layout-fill),body noscript>*{display:block;overflow:hidden!important;position:absolute;to p:0;left:0;bottom:0;right:0}body noscript>*{position:absolute!important;width:100%;height:100%;z-index:2 }body noscript{display:inline!important}.i-amphtml-layout-flex-item,[layout=f lex-item]:not(.i-amphtml-layout-flex-item){display:block;position:relat ive;-ms-flex:1 1 auto;flex:1 1 auto}.i-amphtml-layout-fluid{position:relative}.i-amphtml-layout-size-d efined{overflow:hidden!important}.i-amphtml-layout-awaiting-size{positi on:absolute!important;top:auto!important;bottom:auto!important}i-amphtm l-sizer{display:block!important}@supports (aspect-ratio:1/1){i-amphtml-sizer.i-amphtml-disable-ar{display:none!im portant}}.i-amphtml-blurry-placeholder,.i-amphtml-fill-content{display: block;height:0;max-height:100%;max-width:100%;min-height:100%;min-width :100%;width:0;margin:auto}.i-amphtml-layout-size-defined .i-amphtml-fill-content{position:absolute;top:0;left:0;bottom:0;right:0 }.i-amphtml-replaced-content,.i-amphtml-screen-reader{padding:0!importa nt;border:none!important}.i-amphtml-screen-reader{position:fixed!import ant;top:0px!important;left:0px!important;width:4px!important;height:4px !important;opacity:0!important;overflow:hidden!important;margin:0!impor tant;display:block!important;visibility:visible!important}.i-amphtml-sc reen-reader~.i-amphtml-screen-reader{left:8px!important}.i-amphtml-scre en-reader~.i-amphtml-screen-reader~.i-amphtml-screen-reader{left:12px!i mportant}.i-amphtml-screen-reader~.i-amphtml-screen-reader~.i-amphtml-s creen-reader~.i-amphtml-screen-reader{left:16px!important}.i-amphtml-un resolved{position:relative;overflow:hidden!important}.i-amphtml-select- disabled{-webkit-user-select:none!important;-ms-user-select:none!import ant;user-select:none!important}.i-amphtml-notbuilt,[layout]:not(.i-amph tml-element),[width][height][heights]:not([layout]):not(.i-amphtml-elem ent),[width][height][sizes]:not(img):not([layout]):not(.i-amphtml-eleme nt){position:relative;overflow:hidden!important;color:transparent!impor tant}.i-amphtml-notbuilt:not(.i-amphtml-layout-container)>*,[layout]:no t([layout=container]):not(.i-amphtml-element)>*,[width][height][heights ]:not([layout]):not(.i-amphtml-element)>*,[width][height][sizes]:not([l ayout]):not(.i-amphtml-element)>*{display:none}amp-img:not(.i-amphtml-e lement)[i-amphtml-ssr]>img.i-amphtml-fill-content{display:block}.i-amph tml-notbuilt:not(.i-amphtml-layout-container),[layout]:not([layout=cont ainer]):not(.i-amphtml-element),[width][height][heights]:not([layout]): not(.i-amphtml-element),[width][height][sizes]:not(img):not([layout]):n ot(.i-amphtml-element){color:transparent!important;line-height:0!import ant}.i-amphtml-ghost{visibility:hidden!important}.i-amphtml-element>[pl aceholder],[layout]:not(.i-amphtml-element)>[placeholder],[width][heigh t][heights]:not([layout]):not(.i-amphtml-element)>[placeholder],[width] [height][sizes]:not([layout]):not(.i-amphtml-element)>[placeholder]{dis play:block;line-height:normal}.i-amphtml-element>[placeholder].amp-hidd en,.i-amphtml-element>[placeholder].hidden{visibility:hidden}.i-amphtml -element:not(.amp-notsupported)>[fallback],.i-amphtml-layout-container> [placeholder].amp-hidden,.i-amphtml-layout-container>[placeholder].hidd en{display:none}.i-amphtml-layout-size-defined>[fallback],.i-amphtml-la yout-size-defined>[placeholder]{position:absolute!important;top:0!impor tant;left:0!important;right:0!important;bottom:0!important;z-index:1}am p-img[i-amphtml-ssr]:not(.i-amphtml-element)>[placeholder]{z-index:auto }.i-amphtml-notbuilt>[placeholder]{display:block!important}.i-amphtml-h idden-by-media-query{display:none!important}.i-amphtml-element-error{ba ckground:red!important;color:#fff!important;position:relative!important }.i-amphtml-element-error:before{content:attr(error-message)}i-amp-scro ll-container,i-amphtml-scroll-container{position:absolute;top:0;left:0; right:0;bottom:0;display:block}i-amp-scroll-container.amp-active,i-amph tml-scroll-container.amp-active{overflow:auto;-webkit-overflow-scrollin g:touch}.i-amphtml-loading-container{display:block!important;pointer-ev ents:none;z-index:1}.i-amphtml-notbuilt>.i-amphtml-loading-container{di splay:block!important}.i-amphtml-loading-container.amp-hidden{visibilit y:hidden}.i-amphtml-element>[overflow]{cursor:pointer;position:relative ;z-index:2;visibility:hidden;display:initial;line-height:normal}.i-amph tml-layout-size-defined>[overflow]{position:absolute}.i-amphtml-element >[overflow].amp-visible{visibility:visible}template{display:none!import ant}.amp-border-box,.amp-border-box *,.amp-border-box :after,.amp-border-box :before{box-sizing:border-box}amp-pixel{display:none!important}amp-anal ytics,amp-auto-ads,amp-story-auto-ads{position:fixed!important;top:0!im portant;width:1px!important;height:1px!important;overflow:hidden!import ant;visibility:hidden}html.i-amphtml-fie>amp-analytics{position:initial !important}[visible-when-invalid]:not(.visible),form [submit-error],form [submit-success],form [submitting]{display:none}amp-accordion{display:block!important}@media (min-width:1px){:where(amp-accordion>section)>:first-child{margin:0;bac kground-color:#efefef;padding-right:20px;border:1px solid #dfdfdf}:where(amp-accordion>section)>:last-child{margin:0}}amp-accordi on>section{float:none!important}amp-accordion>section>*{float:none!impo rtant;display:block!important;overflow:hidden!important;position:relati ve!important}amp-accordion,amp-accordion>section{margin:0}amp-accordion :not(.i-amphtml-built)>section>:last-child{display:none!important}amp-a ccordion:not(.i-amphtml-built)>section[expanded]>:last-child{display:bl ock!important} window.__SP_CONFIG__ = {"accountId":1746,"baseEndpoint":"https://cmpv2.independent.co.uk","ccp a":{},"gdpr":{},"isSPA":false}; window.__SP_SCRIPT_TAG_ID__ = 'sp-script'; window.__SP_EVENT_ERROR__ = 'esi:spError'; Jump to content Subscribe (BUTTON) Login (BUTTON) (BUTTON) (BUTTON) Subscribe (BUTTON) Login (BUTTON) * News + UK + World + US + UK Politics + Brexit + Tech + Science + Education + Health + Business + InFact * Independent TV * Climate + SGI + COP26 + Climate News + Climate Voices + Climate Life + InFact Climate * Sport + Football + Formula 1 + Boxing + Rugby Union + Cricket + MMA * Voices + Stop the Illegal Wildlife Trade + Editorials + Letters + Shaparak Khorsandi + Mary Dejevsky + Mark Steel + Janet Street-Porter + John Rentoul + Sean O’Grady + Tom Peck * Culture + Film + Music + TV & Radio + Books + Art + Photography + Theatre & Dance + Streaming Hub + Games + Geoffrey Macnab + Clarisse Loughrey + Ed Cumming + Crosswords & puzzles * Premium + John Rentoul + Mary Dejevsky + Chris Blackhurst + Marie Le Conte * indy/life + Travel + Women + Fashion & beauty + Food & Drink + Dating & relationships + Health & fitness + Royal Family + Tech + Money + Design & home + Motoring * IndyBest + Home & garden + Kids + Books + Travel & outdoors + Fashion & Beauty + Food & Drink + Tech + Sports & Fitness + Competitions + Deals + Compare + January Sales * indy100 * My Independent + Most commented + Ask Me Anything + Virtual Events + Newsletters + Competitions * Vouchers + Samsung + Very + MADE + Oliver Bonas + eBay + TUI + Nike + ASOS + Footasylum + Size + AO.com + Gousto + Vodafone + Gym King + Audible + Cyber Week * Compare + Best Broadband Deals + BT Broadband Deals + Virgin Media Broadband Deals + NOW Broadband Deals + All Broadband Providers + Mobile phone deals + SIM Only Deals + iPhone Deals + Best UK Mobile Networks (BUTTON) (BUTTON) (BUTTON) (BUTTON) * UK Edition * US Edition * Asia Edition * Edición en Español {{#items}} * {{#edition}}{{/edition}}{{title}}{{#children}} {{/children}} {{#children}} {{{children}}} {{/children}} {{/items}} Thank you for registering Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in Money Why should we care about inheritance tax? The past year has been lethal in more ways than one. And then there’s the taxes Rebecca Goodman Wednesday 07 July 2021 07:00 [spinner_on_white.gif] Comments (BUTTON) (BUTTON) Article bookmarked Find your bookmarks in your Independent Premium section, under my profile [ ] Don't show me this message again ✕

Inheritance and capital gains could be easy targets for the government

Inheritance and capital gains could be easy targets for the government (Getty) It has always felt like a problem only the rich have to worry about. But as rumours circulate over an inheritance tax raid and warnings grow over the impact of house prices on the value of our personal estates, more of us need to start taking this eye-watering 40 per cent tax seriously. Or do we? The first thing to look at is the numbers, which unhelpfully, are always a little out of date. The last recorded figures are from 2017 to 2018 when just 3.9 per cent of deaths reported the charge. This was a fall from 4.6 per cent the year before, because of the introduction of the residence nil rate band in 2017, which increased the limit at which the tax is due for some estates. That’s around 25,000 estates, which is a relatively small number. However, the figures are expected to be much higher for the past year, because of the surge in deaths from the coronavirus pandemic. So why is there such an outburst each time there’s talk of inheritance tax being changed or increased? It’s to do with how much is charged. In the past 10 years the amount paid in IHT has roughly doubled, mainly because of the colossal increases in house prices and investments, and the average sum paid from 2017 to 2018 was £197,000. The annual cap we are all allowed to bequeath without inheritance tax being due is currently £325,000. There’s also the residence nil rate band of £175,000, but only if you pass a main residence onto a child or grandchild. There are strong arguments for and against the tax. If you’ve spent your life building up your wealth to hand down to your family, and you’ve already paid tax on it once, you’re not going to be happy if another 40 per cent of it goes to the Treasury. Similarly, if you want to give younger relatives any chance of buying their own home, rising rents and property prices mean this might be the only way to do it. At the same time, the entire point of IHT is to rebalance wealth and to prevent inheritance from making the rich even richer. Plus, if you’re wealthy enough to have an estate big enough to be taxed, you could argue that the money may be better served elsewhere, such as on the health, social care or education sectors. Sarah Coles, spokesperson for Hargreaves Lansdown, says: “There are a few reasons why people resent paying inheritance tax. It can feel that these are things you have paid tax on when you earned the money, and again when it grew, so this is yet another level of taxation on the same money. Plus, although only a few people pay it, if you face it, it’s a punitive level of taxation – at 40 per cent.” Sarah adds: “Some people try to find a way around paying it, but there are rules in place which put a stop to many of the most common wheezes. “For example, if you sign over ownership of the family home to the children to prevent it falling into your estate, if you’re still living in it and not paying market rent to your children, it’s still included in your estate for inheritance tax purposes.” One of the most common ways to reduce an IHT bill is by writing a will, which ensures your wishes are carried out, allows you choose where you estate goes, and if you are married couple or part of a civil partnership, you are able to pass your inheritance tax allowance to your partner on the first death. Leaving the money to a charity or a community sports club also means there is no tax due. You are also able to legally give away £3,000 in gifts each year, plus £1,000 per person for wedding gifts – or £5,000 for a child and £2,500 for a grandchild – as well as small gifts of up to £250 per person. Regular gifts can be made from your income, if they don’t impact your standard of living, while larger sums of money can also be given as gifts, as long as you live for at least seven years after making them. It’s also important not to forget pensions, as pension balances are free from the tax. Steve Webb, partner at consultants LCP, said: “Although fewer than one in 25 estates face an IHT bill, the tax still generates valuable revenue for the Treasury. “It is a complex tax which means that some people choose to organise their affairs to avoid leaving their heirs with an IHT bill when they die. “One popular route is to give money away and, provided the donor survives more than seven years after the gift is made, the money will not normally count as part of their estate for IHT purposes.” Register for free to continue reading Registration is a free and easy way to support our truly independent journalism By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists (BUTTON) register ____________________Email Please enter a valid email Please enter a valid email ____________________Password Must be at least 6 characters, include an upper and lower case character and a number Must be at least 6 characters, include an upper and lower case character and a number Must be at least 6 characters, include an upper and lower case character and a number ____________________First name Please enter your first name Special characters aren’t allowed Please enter a name between 1 and 40 characters ____________________Last name Please enter your last name Special characters aren’t allowed Please enter a name between 1 and 40 characters [Select your year of birth] You must be over 18 years old to register You must be over 18 years old to register Year of birth [ ] I would like to be emailed about offers, events and updates from The Independent. Read our Privacy notice Opt-out-policy You can opt-out at any time by signing in to your account to manage your preferences. Each email has a link to unsubscribe. {{userRef}}_________ {{#verifyErrors}} {{message}} {{/verifyErrors}} {{^verifyErrors}} {{message}} {{/verifyErrors}} (BUTTON) Create my account By clicking ‘Create my account’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice. This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply. (BUTTON) Register (BUTTON) I'll try later Already have an account? sign in By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice. This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply. More about Inheritance TaxHouse pricesTaxHMRC Join our new commenting forum Join thought-provoking conversations, follow other Independent readers and see their replies [spinner_on_white.gif] Comments 1/1Why should we care about inheritance tax? (BUTTON) Why should we care about inheritance tax? Inheritance and capital gains could be easy targets for the government Getty (BUTTON) (BUTTON) ✕ Subscribe to Independent Premium to bookmark this article Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today. (BUTTON) Subscribe Already subscribed? Log in Most popular Popular videos Trending Featured Sponsored Features Voucher Codes Very Discount Code Extra 20% off all sale items at Very Booking Com Discounts Save 15% or more Booking.com discount codes & cashback in January Debenhams Discount Code Enjoy free delivery with this Debenhams discount code: App only Aliexpress Promo Code Collect up to 70% off all orders with this AliExpress discount eBay Discount Code 20% off computing & mobile phones with this eBay discount code (BUTTON) * Get in touch + Contact us + Jobs + * Our Products + Subscribe + Register + Newsletters + Donate + Install our apps + Archive * Other publications + International editions + Independent en Español + Independent Arabia + Independent Turkish + Independent Persian + Independent Urdu + Evening Standard + Novaya Gazeta * Extras + All topics + Voucher codes + Compare + Independent Advertising + Syndication + Working at The Independent * Legal + Code of conduct and complaints + Contributors + Cookie policy + Donations Terms & Conditions + Privacy notice + Privacy settings + User policies + Modern Slavery Act Thank you for registering Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in (BUTTON) (BUTTON) ✕ Log in ____________________Email address ____________________Password Email and password don't match [ ] Keep me logged in (BUTTON) Submit Forgotten your password? New to The Independent? Register Or if you would prefer: (BUTTON) SIGN IN WITH GOOGLE Want an ad-free experience? View offers This site is protected by reCAPTCHA and the Google Privacy notice and Terms of service apply. Hi {{indy.fullName}} * My Independent Premium * Account details * Help centre * Logout IFRAME: https://www.googletagmanager.com/ns.html?id=GTM-5XT7NPD