Welcome to our latest issue on the rising impact of Inheritance Tax.
In this edition, we delve into several pressing topics aimed at enhancing financial planning and protection strategies in today’s complex landscape.
Inheritance Tax (IHT) Planning
Over the past decade, the amount of Inheritance Tax paid by families has soared, from £3.1 billion in the 2012/13 tax year to £7.5 billion in the 2023/24 tax year.
This sharp rise stems from a combination of growing asset values, stagnant IHT thresholds, and many families postponing proactive planning.
On page 6 of the report, we explore how to make the most of IHT allowances, strategies to minimize IHT liability, tax-efficient gifting and transfers, and how pensions can serve as an effective tool for IHT efficiency.
We also cover additional strategies for reducing your IHT exposure and preserving wealth for future generations.
The Power of Dividends
Dividends, often overlooked as a source of growth, represent a portion of a company’s profits shared with its shareholders. Reinvesting dividends is a powerful tool that leverages compounding to build wealth over time, even if individual shares or the broader stock market experience minimal growth.
On page 4, we examine how reinvested dividends can drive your investment’s growth, providing a steady income stream while harnessing the strength of compound interest.
Planning for Long-Term Care
Long-term care planning can be an uncomfortable topic, yet preparing for potential future care costs is essential to avoid significant financial strain later. The NHS covers care costs only in certain circumstances, generally those with direct medical needs, leaving many to fund care themselves. On page 11, we look at why early planning for potential care expenses is crucial and offer insights on the financial products available to help manage these costs effectively.
Income Protection for Financial Security
In an unpredictable world, safeguarding financial stability is more important than ever. Many individuals, whether employed or self-employed, would face challenges covering essential expenses such as mortgage payments or rent if they were to lose their income due to illness or an accident.
Income protection is a long-term insurance policy that provides a regular income if you’re unable to work, helping to ensure you’re covered until retirement or when you’re ready to return to work.
To learn more, turn to page 10.
Finally, a note on the Autumn Budget: This issue was published prior to the Chancellor, Rachel Reeves, delivering the Autumn Budget Statement 2024 on 30 October.
In our upcoming issue, we’ll offer a detailed overview of the key announcements and analyze their potential impact on your financial planning.
Thank you for reading, and we hope you find these insights valuable in navigating your financial journey.
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Rising Impact of Inheritance Tax
