It was once said the only certainties in life are death and taxes.

Each are bad enough in their own right (although obviously one's worse than the other!) so how unfortunate that thanks to our taxation system the two can be combined! What follows is a brief overview of inheritance tax.

Why are more and more people being caught in the inheritance tax trap? Nowadays, many people own their own houses. Not only that, but the once modest value of their homes has increased disproportionately compared to the increase in the inheritance tax threshold each year.

Add to that insurance policy and pension payouts, share values, ISA's, investments, etc. and suddenly what most of us thought amounted to a modest estate on our death becomes a potential inheritance tax nightmare.

Update following the Chancellors pre-budget announcement on 9th October 2007

The Chancellor announced that the inheritance tax threshold for a married couple will be increased with immediate effect to £600,000. What seems apparent is that for married couples and civil partnership couples (i.e. same sex relationships having had a civil ceremony) with combined estates below this amount may not now need to undertake detailed inheritance tax planning mitigation measures. However, the implications of the Government announcement are by no means clear, and as usual what seems like good news at the moment for inheritance tax payers may well become clearer in the details released over the coming weeks and months.

What is clear is that inheritance tax planning for unmarried couples is of vital since the changes appear to disproportionably benefit married couples, and also for those whose assets are over the new £600,000 allowance. So, if you are unmarried it is more important than ever to make use of tax planning strategies.

For those who have already opted for inheritance tax saving wills (also known as nil rate band discretionary trust wills) the advice at the moment is to retain these wills - there is no need for alarm or to make amendments to your wills. They are still valid and indeed may still be an important inheritance tax tool as more information as to the implications of the announcement becomes forthcoming.

Please contact us to for advice and to discuss your personal situation and we will be happy to help.

Tel: 0115 840 3548

E-Mail: enquiries@tansleywills.co.uk

Tansley Wills
5 William Close
Gedling
Nottingham
NG4 2QX