As Scottish property values rise and recent British Budget decisions continue to freeze inheritance tax (IHT) thresholds, more families face the prospect of substantial tax bills on inherited estates. With these changes, IHT planning has become not just an option but a necessity for families seeking to safeguard their legacy.

The 40% tax rate on estates exceeding the £325,000 threshold - or up to £500,000 if the Residence Nil Rate Band applies - can significantly reduce the wealth passed to loved ones. The recent Budget’s decision to freeze these thresholds further intensifies this challenge, as inflation and asset appreciation push more estates into taxable brackets.

There are strategies that can help families navigate these challenges. By implementing tools like lifetime gifting, trusts, and life insurance policies, you can reduce the taxable value of your estate. Trusts, for instance, allow you to pass assets efficiently while preserving some control, and gifting can help avoid IHT if done strategically. But with complex rules and Budget updates impacting each option, tailored advice is critical.

Many families assume inheritance tax won’t affect them or believe their current arrangements will suffice. However, even minor oversights or delays can lead to unintended tax liabilities. In today’s economic environment, an outdated estate plan can quickly fall short of its goals.

Take Action
If you’re concerned about how inheritance tax might impact your family’s future, getting early legal advice is essential to protect your estate. Don’t leave these decisions to chance – contact us today to learn how tailored tax planning can help secure your legacy for generations to come.

Join our next Ask the Expert session on 17 December 2024, where our local expert, Edward Danks, will guide you through the essentials of inheritance tax planning in Scotland. Learn how proactive steps can help you protect your estate and preserve wealth for future generations.

To book a time with Edward to ask a question contact us on:

 📩 asktheexpert@parissteele.com. 

Our dedicated expert will be happy to provide initial advice, signpost you to additional sources of support or provide a fee quote for more in-depth assistance.