HM Revenue & Customs takes nearly £6bn in inheritance tax (IHT) each year. Record high inheritance tax receipts are great news for the government, but they also signal the importance of organising your afterlife. More and more tax is being paid by UK individuals on their estates because they haven’t done any tax planning.
Historically the preserve of lawyers, probate opened up to accountants in 2014 when the Institute of Chartered Accountants in England and Wales was approved to regulate probate services. There are now at least 330 licensed accountancy firms providing the service, including Haines Watts.
There are obvious benefits to consulting your accountant rather than a lawyer. They have got all the knowledge and information needed to ensure that all the detail is being followed during probate and all the relevant reliefs are being claimed by HMRC. Also, and equally important, you should be talking to your accountant as to how best organize your affairs during your lifetime to keep your exposure to IHT to a minimum.
Probate applications can be particularly daunting and IHT forms have to be filed with HMRC to show the amount of tax to be paid. The hurdle people fall over is that the inheritance tax has to be paid six months from date of death – whereas the probate form doesn’t need to be in for 12 months. For a grieving family, it’s the last thing they want to be doing.
If you do it yourself you might save on cost, but you might end up paying a greater amount of tax. People save all their lives to pay off their mortgage and provide for the future of their family – the worst thing to happen then is for the Revenue to take 40% of that back.
For more information have a read of our fact sheet or get in touch on 03300 889 080.
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