Ever more families grudgingly pay ever more Inheritance Tax (IHT) every year.
But paying six- or seven-figure IHT bills is often simply a case of not acting early enough.
Procrastination is the thief of time… and a major donor to HMRC.
Imagine writing a six-figure cheque to the Revenue, knowing that half of it was easily avoided. Difficult to imagine? I’ll make it easier for you: search online for “IHT400”.
The IHT400 is the main form to assess an Estate’s IHT liability. It may look arcane, but it is pretty simple: the Estate owes 40% of its value as tax, less any allowances and exemptions. The more allowances, and the more exemptions, the less the tax.
But some of these exemptions take time to come into effect, and some require hoops to have been jumped through – as well as evidence of both the hoops and the jumping.
All of this can seem off-putting, and it is intended to be: the more you are put off, the more IHT you will pay.
The steps necessary to avoid IHT are not complicated, but they do require foresight and pre-emptive action. By the time you get to box 119 of the form, it is too late. For many families, box 119 is the biggest financial contribution they will ever make to Her Majesty’s Revenue.