The cost of dying is increasing and only set to rise due to new inheritance tax and death reforms. Couple this with the rising cost of coffins and probate fees. In short, it means that dealing with a loved one’s death will become a cause of debt in the future. It seems that inheritance tax and death go together too well.
The Taxpayer’s Alliance has recently published their findings on the new reforms. Accordingly, they estimate that between the years 2019 and 2020 the new tax reforms will earn the government £5.35 billion. That figure marks the highest amount it has ever received from inheritance tax before. To put this into perspective, in 2010 the amount through inheritance tax was £2.7 billion. The largest jump in costs was between 2014 and 2015. Then, the inheritance tax jump was from £3.8 billion to £4.6 billion.
The Cost of Reform to Inheritance Tax on Death
This report, titled “The Cost of Death” is one of the first comprehensive studies into the subject. Moreover, it ideally summarises the start of systematic change into a system targeting middle-class Britons. The report includes its findings regarding the shift to tax reforms, mainly. This, as well as how the possible probate rate changes will add up to costing real families across the UK. For most, of course, inheritance tax is not an issue. The average cost of homeowners, however, sits around £405 for those families whose family member did have an estate. In turn, this means that simply owning a home in London, costs rise upwards to £60,773. But with the new inheritance tax, it could increase even further to £61,773. This amount doesn’t take into consideration the average cost of a funeral in the UK. As of 2019, the cost is approximately £3,757 (£4,267 for burial, in comparison with £3,247 for cremation). The proposed increase to probate fees is on hold. Further, the motion to put the proposed changes does not yet have a scheduled date. If they do come into play, however, the changes will mean that the probate will switch significantly. For example, the flat rate of £215 goes to a banding system similar to how land registry fees work. This is not the same as the inheritance tax, however. That setup applies mainly to those with a significant estate/property in areas such as London. Rather, this change to probate will affect all homeowners. The change will increase between £35 to £5,785 on top of the £215 set fee we currently see.
This change is “anti-aspirational” according to John O’Connell. He believes (rightly) that the changes discourage families from trying to save up anything to pass on to their children. Moreover, the lack of confidence is compounded by the other changes that take effect year on year. As a result, families lose out on savings, earnings, and property that is already subject to taxation. Or, in this case, a lot. In turn, the hard work and savings parents put into the future of their families might one day be for nought. Currently, the Taxpayer’s Alliance has taken their findings to the Ministry of Justice and to the Treasury. As a citizen of the UK, however, you can work to protect your assets. Start by getting in touch with an inheritance lawyer to learn of your options. Moreover, expert lawyers help you manage your assets to ensure as much of your estate as possible goes to the beneficiaries. When it comes to receiving the right inheritance, you need the experts on your side. By coincidence, that’s where we can help. Our team guides you through the process of disputing/contesting a will or probate. In turn, we help you to achieve the best possible outcome. Don’t hesitate to contact us today to discuss your needs.
Other things we write about concerning Inheritance
Additionally, be sure to learn more about our expertise in the areas of Inheritance and your finances.
- For instance, we share insights on who specifically can make Inheritance Act Claims.
- We also outline three specific areas for legitimate disputes of a will’s validity.
- Don’t know the specific language involved with inheritance and trust issues? Here are the Key Terms to Know For a Family Dispute Over a Will.