A new inheritance tax planning service has been launched this week through a free-to-use website, legacyway.co.uk, by the Dorset-based financial services company, The WAY Group.
The new service is designed to help dispel some of the common myths around inheritance tax planning – namely that it is complex, expensive and only relevant for the rich.
The website, legacyway.co.uk, includes a free and simple-to-use inheritance tax calculator so people can check how big a tax bill they could be building up. The calculator considers lifestyle factors, asset and liabilities to work out how big a tax bill might be generated if a person passed away today or in ten years’ time. Having established the inheritance tax a family could be left to pay, the website goes on to provide guidance about how to reduce and even potentially eliminate this liability. The launch of LEGACY WAY also introduces ‘Savvy Squirrel’ in a short cartoon that explains how LEGACY WAY provides a unique Trust-based solution to help mitigate inheritance tax. The site includes a host of free, simple guides and documents which identify all of the exemptions that exist and how best to use them.
Inheritance tax has often been thought of as a tax simply for the super-rich. But with house prices in particular increasing, many more people are falling into this bracket and last year more people paid the tax than ever before1. According to official figures from HMRC, in 2015 / 16 tax year (the last year for which full figures are available), 312 estates across Dorset were due to pay a total inheritance tax bill of £51 million2.
The strong local property market means more people in the region are likely to pay inheritance tax in the future. In Dorset, house prices increased by 11% from 2015 to 20173. Last year’s average sale price of detached properties was £448,2513, which is greater than the basic inheritance tax threshold of £325,000. Previous research from WAY has shown that most people are simply unaware of whether or not inheritance tax might apply to them4.
There is more to inheritance tax than a single threshold though. A number of exemptions exist, including the residential nil-rate band and rules around giving away money or assets as gifts. This means that families who make considered financial plans may actually be able to reduce or even eliminate any future inheritance tax bill their families might otherwise have to pay. WAY is urging people to check their position on inheritance tax before it is too late. Some people will be quite used to managing their own investments, and the LEGACY WAY website can help them to do this for Inheritance Tax. Those who feel they need expert financial advice to put the most appropriate plans in place can contact WAY through the new LEGACY WAY site, where arrangements can be made for someone to make contact and discuss their exact requirements. This will identify the best route to take, and in the event that this requires a local financial adviser, LEGACY WAY is well positioned to recommend a firm with good expertise in the world of Inheritance Tax mitigation.
Ian Hobday, CEO of the WAY Group, comments:
“Through LEGACY WAY, we want inheritance tax to be easier to understand, less complex and explained in plain English. Instead of just guessing, our online calculator is designed to help people gain a more accurate estimate of just how big their IHT bill could be. With the allowances available, the majority of people will not leave their loved ones with an inheritance tax bill on their death. But for those who could be liable, the sooner they start to understand their position, the better able they will be to make sure their loved ones don’t simply inherit problems.
“The average inheritance tax bill in Dorset is now over £160,000, which is certainly not what most people would want to leave behind for their families to pay. Even if a home is left in a will, if plans haven’t been made to pay the tax bill families may be forced to sell the property to meet the Inheritance tax bill before they would wish to. We are urging people not to take the risk of thinking inheritance tax doesn’t apply to them. Some simple steps taken today can potentially reduce an inheritance tax bill in the future, as well as ensure the way any bill will be paid has been thought about. It’s really important not to leave it too late, so taking a few minutes to use the new inheritance tax calculator is a great place to start.”
WAY’s new Inheritance Tax service is available at legacyway.co.uk.
- Source: HMRC https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/730110/Table_12_1.pdf
- Source: HMRC https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/730144/Table_12_10.pdf
- Source: Rightmove https://www.rightmove.co.uk/house-prices/Dorset.html )
- Source: WAY Investment Services research, published in Moneywise https://www.moneywise.co.uk/news/2017-10-06/one-four-over-50s-unsure-inheritance-tax-liabilities