Inheritance skipping a generation

Recently the housing minister Gavin Barwell has been urging grandparents to disinherit their children in favour of their grandchildren in an attempt to try to rebalance the distribution of wealth in favour of younger people. Enable’s IFAs in Bishops Stortford can see that many families are already doing this to some extent, a generations plan how best to help younger generations.

In many cases it is also about passing money down well before death. As with all gifts of any size, provided the giver survives seven years, there is no inheritance tax to pay.

The simplest way to help grandchildren is often to help them buy a house by giving them the money for the deposit the property is then  in the grandchild’s name, and the mortgage is their responsibility. But despite the benefits of this some 'Pensioners don't trust their children or grandchildren' says Angela Murfitt. “There’s a view among the older generation that it’s a very generous thing to give grandchildren £200 a year, regardless of the fact that there is £1 million sitting in the bank,” said Murfitt, a financial planner with clients are in their seventies and almost all likely to face an inheritance-tax bill. “It can make perfect sense to give money away,” she said. “But it’s a moot point when it comes to writing the cheque. People don’t want to lose control over their own assets.

If the straightforward handing over of cash is not for you there are plenty of other solutions which help bridge the inter-generational wealth gap and Enables IFAs in Bishops Stortford are happy to talk you through your options for helping the next generation.

Source: http://www.telegraph.co.uk/personal-banking/mortgages/the-new-bank-of-mum-and-dad-we-live-in-dads-buy-to-let/

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Inheritance Tax bill set to rise…

Enable’s IFA’s in Bishops Stortford have much experience in helping financial planning and Inheritance Tax is always a factor to consider. Recent Inheritance tax receipts for the 12 months to February 2016 published by the Office for National Statistics, show the inheritance tax bill is on track to be more than a fifth higher than last year.  The Government is expected to take £4.6bn in inheritance tax in 2015-16 compared to £3.8bn for the same period in 2014-15. Projections from Office for Budget Responsibility (OBR) also show that the number of family estates on which inheritance tax has to be paid has quadrupled since 2010, with the number up from around 10,000 to more than 40,000 this year.

At the moment estates worth up to £325,000 can be passed on without paying inheritance tax.  There is then a rate of 40pc tax payable over that threshold. This is due to change in April 2017 when the Government introduce an additional tax-free allowance which will ultimately allow homeowners to leave an extra £175,000 in property wealth. Making a property allowance of £500,000 for individuals or £1m for couples.  But the OBR data suggests that despite the new reforms, the number of families paying inheritance tax is still likely to soar in future years.

The Treasury may well want “hard-working families to be able to pass on their home to their children or grandchildren.” But more families will be pulled into the inheritance tax net than ever before and if you are paying inheritance tax now and just missing out on the higher allowances you might reasonably be feeling resentful it’s a tax that taxes something people have already paid income tax on.

Source: The Telegraph

Issued by: Enable Independent Financial Life Planners • 
25c North Street, Bishops Stortford, Herts CM23 2LD • Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE 

Budget Inheritance tax changes

Enable’s IFA’s in Bishop’s Stortford take great care to help people plan the management of their financial estate well, part of this includes planning for any legacy. In the latest budget the Chancellor has decide that from 2017 the inheritance tax threshold will be phased into increase to £1million underpinned by a new £325,000 family home allowance.

Essentially inheritance tax is to be scrapped on homes worth up to £1m the inheritance tax policy will be funded by limiting the amount of tax relief on pension contributions given to those earning more than £150,000 a year. In a joint article, Mr Cameron and Mr Osborne write: "As we promised in our manifesto, we'll take the family home out of inheritance tax for all but the richest."
They add: "It can only be right that when you've worked hard to own your own home, it will go to your family and not the taxman." Andy Silvester, campaigns director at the Tax Payer Alliance (TPA) said: "Inheritance tax is one of those things, that even for people who frankly would not be hit by it at the moment, is a really unpopular tax. "People find it fundamentally unfair that income you've already been taxed on in order to buy your house is taxed on when you die.

From April 2017 parents will each be offered a further £175,000 "family home allowance" to enable them to pass property on to children tax-free after their death.  This will be added to the existing £325,000 inheritance tax threshold, bringing the total transferable tax-free allowance from both parents in a married couple or civil partnership to £1m.

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
 Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

Election promises for Inheritance Tax change...

With the next General on the horizon Enables IFA’s in Bishop’s Stortford are looking out for changes that will impact on Financial Planning. Recently the Prime Minister David Cameron has pledged the Conservatives will create a new threshold for inheritance tax of £1m if they are re-elected.  They say that these changes would come into effect from April 2017.

They say that they will fund these changes by putting restrictions on pension tax relief for those earning more than £150,000. The changes would mean that the annual allowances for savings would be tiered on earnings between £150,000 and £210,000, with those earning £210,000 seeing their annual allowance cut from £40,000 to £10,000.

But David Cameron said “the individual Inheritance Tax threshold will be raised from £325,000 to £500,000 when property is included, giving married couples a shared £1m threshold.” Cameron said: “We will take the family home out of inheritance tax. That home that you have worked and saved for belongs to you and your family. You should be able to pass it on to your children. And with the Conservatives, the taxman will not get his hands on it.”

The Conservatives pledged to raise the limit to £1m in their 2010 manifesto, a move blocked by the Liberal Democrats in coalition. Labour also plans to reduce pension tax relief for those earning over £150,000. Whether these potential changes affect you or not our IFA’s at Enable are happy to talk you through the implications of Inheritance Tax and help you maximise your financial plans for you and your family.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE