Survey reveals lack of awareness of inheritance rules

Results of a new survey by Quilter suggests that 63 per cent of people in Northern Ireland and the rest of the UK are not aware of some of the main regulations on passing on their wealth after they die.

The survey found that 59 per cent of people were not aware of the Residential nil-rate-band (RNRB) threshold, which was increased to £150,000 on 6th April. This inheritance tax relief is available where a death occurs on or after 6 April 2017 and acts as an additional nil rate band for estates involving a residence or the sale proceeds of a residence being left to a direct descendent.

Less than half of those surveyed were aware of the annual £3,000 limit on gifts made during your lifetime before they are added to the value of your estate for inheritance tax purposes. This is known as the annual exemption. Any unused element of the £3,000 allowance can be carried into the next year but not beyond that. This exemption can be used to reduce the size of an estate during the lifetime of the owner so as to reduce the inheritance tax payable on death.

Over half of those surveyed were aware of the overall inheritance tax nil-rate band of £325,000. This is the value of an estate that can be passed on without incurring any inheritance tax, which is then charged at 40 per cent on everything above the £325,000 threshold. Last year the UK treasury collected a record £5.2billion in inheritance tax.

If you require advice on estate planning including writing a Will and inheritance tax matters contact Wilson Nesbitt in Belfast or Bangor by clicking here.

Our team of experts can also provide advice on trust & asset gift planning and the inheritance or capital gains tax consequences of the various options you have.