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Families urged to update wills to avoid IHT increases

Families urged to update wills to avoid IHT increases

In order to protect their finances from possible increases in inheritance tax (IHT), families are being encouraged to update their wills, the Daily Mail has claimed.

The publication points out that such tax is currently charged at 40 per cent on legacies.

However, bequests made to a spouse or charity are free and the first £325,000 of any other gifts is tax-free.

According to Daily Mail, due to the ongoing recession, it will become increasingly difficult for politicians to lower tax rates and there may be an end to "generous" IHT thresholds.

Indeed, Andrew Priestley, head of technical services at Skipton Financial Services, commented: "As the economy has deteriorated, an increase in the IHT allowance is going to be more difficult for politicians to deliver."

During an NFU Mutual seminar on financial issues, Sue Haughton, a chartered financial planner with the firm, advised consumers to update their wills to avoid potential rises in IHT.

Meanwhile, Michelle Gildernew MP recently urged farmers to draw up wills, saying that failing to do so can cause problems concerning the release of financial entitlements.