According to Danny Carter of Gepp & Sons, “We are probably all thoroughly tired of hearing how property and share prices have declined in value in recent months. But this otherwise regrettable situation does mean that it may now make better sense for people to pass assets on to their chosen inheritors straightaway (in a so-called ‘lifetime gift’), since doing so will not expose the recipients to such large Capital Gains and Inheritance Tax bills.”
Increasing numbers of people have been holding off making substantial gifts during their lifetimes, because of the rules that expose people receiving assets to potentially very large payments, if the giver dies within seven years of making the gift.
“Now that values are not sky-rocketing any more, this risk is reducing. In increasing numbers of cases it makes sense to act now,” he says. “This can be particularly important in families where the younger members cannot find the loans they need to get on the housing ladder, even though they need their own home now.”
There has also been an important change to the amount of security that surviving partners receive when their spouse dies without making a will. From 1 February, if there are children from the marriage or civil partnership, the surviving spouse will automatically receive up to 250,000 GBP from the estate, a rise from the former threshold of 125,000 GBP. Where there are no children, the spouse will receive up to 450,000 GBP, up from 200,000 GBP. This is always on the assumption that the estate is of sufficient value.
Danny Carter emphasises, however, that this increase in thresholds is not a reason to decide against making a will. “When announcing the change last summer, Justice Minister Bridget Prentice said: ‘Married couples and civil partners should not assume that when their spouse or civil partner dies, they will automatically be entitled to everything. It is up to individuals to make sure that their wishes are respected by making a will. My message to people is, don’t leave it to chance. Make sure your loved ones are properly provided for by leaving a will.’ I could not agree more, and would urge anybody who has not made a will to do so as a priority.”
Whatever your circumstances, it is important that you make a will. Without one the law dictates who inherits your estate, which may mean that you do not provide for your loved ones as you would wish.
Gepp and Sons are one of the largest and longest established solicitors in Essex offering a full legal service to business and private clients, working under full ISO quality accreditation.
http://www.geppandsons.co.uk