2 Inheritance Tax (IHT) and Legacy Planning IHT receipts are rising each and every year. In April 2025 alone the Treasury coffers received £780m in IHT (figures release by HRMC on 22nd May 2025). The year 2024/2025 saw record IHT intake of £8.2bn. (Source: www.gov.uk/ government/statistics/hmrc-tax-and-nics-receipts-for-the-uk) The threshold freeze while assets continue to climb means more estates need to consider the impact on them. Add in the government’s plans to include pensions into the tax scope from April 2027 and we can see the direction the receipts will go quite clearly. Receipts will also increase with other policy changes, including limits to agricultural and business relief, as well as the extension of the freeze to 2029/30. Yet, it is still called a “voluntary Tax”. I guess this is because one can take steps to mitigate IHT if not eradicate totally, however this requires advice and consideration of various factors especially as families can be complex, money can be an emotional subject, and money also means different things to different people as do lifelong assets. Careful and comprehensive planning, supported by expert advice is key for managing your position in a way that supports your own financial goals whilst reducing if not removing what HMRC, the “silent beneficiary”, gains. Without comprehensive estate planning your estate will also suffer generational inheritance tax – the “Double whammy” – who is affected? Anyone whose Will does not include Trusts and where assets are passed directly to beneficiaries. It gets worse for unmarried couples as for IHT purposes they are deemed to be single. Estate planning in lifetime and/or on death is a subject every family should discuss alongside Wills, Trusts, Lasting Powers of Attorney – all of which will make a huge difference to those you care about as well as yourself. You may also be pleasantly surprised at the benefits and relative cost and risk mitigation with whole of life insurance, written in trust – perhaps where funds are needed in lifetime and cannot be gifted. Protection in this manner is not only outside probate so can be used to fund immediate needs, but it also provides a source of IHT payment without being forced to sell assets (family homes or farms for example). Reviews – as with any other form of planning are important as life itself changes as does the environment we live in. Therefore, you may have already dealt with your estate some while back and that’s to be applauded, however have you had a review of late? Family circumstances or legislation changes which have taken place may mean your plans need tweaking or updating fully? Investors and governments alike have had a turbulent ride as the effects of President Trump’s tariff see-saws play out. Continued international volatility and rising living costs mean taking time to focus on financial planning is increasingly crucial. In this edition of our newsletter we look at key lessons from the US president’s ‘Liberation Day’. For many people, their pension is their most important, long-term investment. Recent research has highlighted the growing numbers likely to find their pensions unable to fully fund their later years. Our feature considers strategies across the years of pension savings to improve your retirement position. Once you do retire, planning how to take your income to meet spending needs is a big decision. There’s no single solution, so tailored plans and regular reviews will help you adjust as circumstances change. If your planning includes hoping to help a child with a wedding or civil partnership, starting to set money aside early is crucial as prices increase. And even if the event doesn’t materialise, there’s a savings fund ready to help with other milestones. 03 Lessons of ‘Liberation Day’ Don't overreact to the tariff wars despite immediate shocks 04 The long road to retirement Pace yourself for your pension planning journey 05 Ready for Making Tax Digital? From April 2026 sole traders and landlords with turnover above £50,000 will have to report tax digitally 06 Wedding bells and wedding bills Start saving early to help fund your children's weddings. 07 Funding for long-term care Social care reform is still a decade away, so make provision for your later-life needs in your planning. 08 Understanding mid-retirement income needs Spending needs change over retirement so review your position regularly In this issue... This newsletter is for general information only and is not intended to be advice to any specific person. You are recommended to seek competent professional advice before taking or refraining from taking any action on the basis of the contents of this publication. The newsletter represents our understanding of law and HM Revenue & Customs practice. © Copyright 18 June 2025. All rights reserved. Credit: Phovoir/Shutterstock.com Credit: Serhii Brovko Shutterstock.com
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