Property tax advice can reduce IHT bills
Property tax advice not only protects your investment over the short term – for example by reducing your exposure to capital gains tax and stamp duty on property you buy and sell in the current financial year – but can also protect your assets for the long term, including those that ultimately form part of your estate for inheritance.
Asset values such as property are a major contributor to inheritance tax, and the latest government figures for IHT receipts show a substantial increase in the amount of IHT collected in each year since the recovery from recession began in 2010.
“Since 2009-10, receipts have increased both in terms of annual revenue and as a proportion of GDP,” the HMRC tax bulletin states. “Receipts increased substantially in 2015-16 as a result of rising asset values.”
In 2016-17, this continuing trend took IHT receipts to almost £5 billion, and receipts for April-June 2017 were up by nearly 23% over the same period of the previous year.
While the exact amounts depend also on the number of deaths in a particular year – for example, the total for 2015-16 was preceded by an unusually high death rate – they are also an indicator that more of the value of assets that people would like to leave to their descendants is perhaps ending up in HMRC’s bank account instead.
Property tax advice in this sense delivers double on the effort you put into it and on the professional property tax advice you get – putting your affairs in order so that you can minimise the amount of tax you have to pay on rental income receipts, capital gains tax and on transaction costs like stamp duty, while also making your estate as a whole more tax efficient.
With the right advice, you know not only that your assets are protected against the unwelcome attention of the tax man, but that the inheritance you leave will remain intact for your loved ones to enjoy full use of those assets – whether to live in or to rent out.
This is especially important at a difficult and emotional time, so that nobody faces having to sell off assets to cover an unexpected IHT bill, when professional property tax advice could have helped to minimise it further.