FAMILY VALUES DISTRIBUTED WITH


10TH SEPTEMBER 2024


Passing it on? Planning for generational changes to inheritance tax


Look to the future with the help of Womble Bond Dickinson Wealth As we fall into autumn,


families


and financial planners are turning their eyes to the upcoming Budget on 30 October — the first under the new Labour government. You don’t have to look far to find rumours and predictions about what’s ahead What do we actually know,


though? In order to raise revenue, changes are coming. Along with a commitment not to raise income tax, VAT or national insurance rates, prime minister Sir Keir Starmer has warned the Budget will be a ‘painful’ one for higher earners. Tis means capital gains tax, inheritance tax (IHT) and pensions could be in the government’s sights. Joe Long, a wealth advisor at


Womble Bond Dickinson Wealth, says, “One potential change could be


removing the inheritance


tax-free status of pensions, a funda- mental shift in how savings are thought about and passed down over generations. “Younger generations often rely


on inheritance to boost living stand- ards and get on the property ladder; pensions are a popular choice to pass on wealth.” While it’s unlikely the current 40%


rate for IHT will move, what might shift are lifetime gifting rules. Intro- ducing a limit on how much can be gifted over a lifetime, or charging an immediate tax if a gift is over a certain amount, could mean more families are hit with an IHT bill. As many parents give their children funds to help raise a


house deposit (with a plus of reducing their own estate for IHT purposes), this could stagger future family planning. Does this mean you should be


making (or encouraging others to make) lifetime gifts ahead of the Budget? Not necessarily — histor- ically, no matter the government, there’s usually a period before changes comes into force. Tere’s no need to hit the panic


button yet, especially given the spec- ulation and lack of certainty to make concrete plans. Instead, a positive action you can


take now is reviewing your personal finances to get your house in order. Working with financial and legal advisors who know the market and the changing circumstances like the back of their hand will put you in good stead no matter what happens.


Family Finance & Legal 27


“Tere’s no need to hit the panic button yet, especially given the speculation and lack of certainty. Instead, a positive action you can take now is reviewing your personal finances”


JOE LONG


This article, written by Womble Bond Dickinson Wealth Limited, which is regulated by the Financial Conduct Authority, is provided for general information only and reflects the relevant rules at the time of publication in September 2024. This article does not constitute any professional advice and so should not be relied on for any purposes. You should consult a suitably qualified professional adviser for further assistance. Please note that past investment performance is not a guide to future performance. The value of an investment and any income from it may go down as well as up over time and investors may not get back the amount originally invested. Care should be taken to ensure that any financial plan and its underlying components are regularly reviewed to take account of any changes such as personal situation, objectives, tax rates and the variabilities of investment performance and associated charges over time.


For further information, visit womblebonddickinson.com/uk


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