Covid19 causes grandparents to pass on more money to families
Millions of people have found themselves out of work due to the Covid19 pandemic and thousands of businesses have had to close their doors due to the various lockdowns.
The spike in financial uncertainty has caused many grandparents to want to provide greater security for their grandchildren and have said they want to gift their wealth to their grandchildren when they pass away.
More than one in seven grandparents, (according to a survey carried out by Killick & Co), said that the pandemic had made them reassess how they want to pass on their inheritance with two in five stating they wanted to increase the monetary amount.
Hannah Pearson, Solicitor in our Wills , Trusts, Tax and Probate team said, “It is perfectly understandable after the year that we’ve had, that grandparents will be more mindful of their grandchildren’s future but they mustn’t forget their own needs either. It is very important to discuss such matters so that families don’t pay more inheritance tax than they need to.”
Top Tips to reduce your Inheritance Tax Bill
- Give to your spouse or civil partner. Anything you give to your spouse or civil partner is free of inheritance tax
- Give to your Family or Friends. Inheritance tax is due on the gift’s value but only for seven years
- Give Annual amounts away – you can give up to £3000 per year without any inheritance tax implications.
- Give to your children and grandchildren when they get married – you can give £5000 to a child or £2500 to a grandchild as long as the gift is made either on the day of the wedding or shortly before that date
- Put assets into a trust – when you put cash, property or investments into a trust they are no longer part of your taxable estate once seven years have passed
- Donate to Charity – anything you leave to charity is also free of inheritance tax
In a 2018 study* it showed that only 1/5 of people talk about inheritance with their families and another 1/5 saying that they have no idea how much they are likely to inherit.
“When there are significant sums of money involved it is so important to talk to loved ones early about your intentions. This could help so many families avoid tax bills, all because parents are too embarrassed to talk about their financial future”, says Hannah, who specialises in Wills, Probate and the Administration of Estates, Powers of Attorney, Trusts and Tax.
“Talking things through with your families is so important. You could be helping your children or grandchildren get on the property ladder or give them a good start in life by giving them their inheritance early,” she adds.
*Source: Money Advice ServiceSubscribe to our newsletter
Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.
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