Inheritance tax update

On 6 April, the inheritance tax threshold will increase to a higher level. The new threshold is now £325,000 and will be applicable to estates from that date onwards inclusive.

Properties are now worth up to 15% less than last year. What this means is that these estates may now fall in or below the inheritance tax bracket, and some may not even be eligible to pay it altogether.

Even if some of the estate is held in shares, this also applies as UK company shares are currently worth around a third less than a year ago. Bank shares are up to half the value.

As inheritance tax is due on the value of the estate on the day a homeowner dies, it is worth asking for houses to be re-evaluated in the event of a death. It is advisable to sell property or shares as soon as possible after a death. Statutory rules allow the tax to be cut even in the event that it has already been paid. If within four years, the property is sold at a lower price than the valuation, then the lower value will be used to recalculate the amount of tax that has to be paid. Share must be sold within a year to get the same benefit.

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