Welcome to this month’s ‘Money Matters’ columns, brought to you in association with Peter Harding Wealth Management.

Chartered Financial Planner, Peter Harding, discusses why so many more families are paying Inheritance tax (IHT) and how you can take steps to help reduce its impact.

We also get to meet Wealth Management Consultant, Robbie Holman, and learn about his interests, including local rugby coaching.

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IHT, once thought of as a tax on the truly affluent, now affects more families than ever before.

Leaving loved ones to incur up to a 40% reduction due to tax on their inheritance is a hard ask. Yet despite many children and grandchildren being ill-equipped to grapple with IHT, more and more families are having to deal with it.

It’s a situation that is set to continue, with the Office of Budget Responsibility forecasting that IHT revenues will reach £8.4 billion by 2026/2027.

In better news for your family, the residence nil-rate band threshold, was introduced in stages and is now set at £175,000 for those who qualify when passing their main residence to direct lineal dependents. This goes some way to reflect surges in property prices, as well as other asset values recovering, which together have dragged more households into the IHT net.

Nevertheless, it can come as a shock to discover that a large proportion of your wealth, which includes the family home, investments such as Individual Savings Accounts (ISAs), life assurance plans not in trust and even old family heirlooms might be subject to IHT.

What exactly could your family be liable for? We’ve already discussed the residence nil-rate band threshold of £175,000. Then you can factor in that the first £325,000 of your estate is likely to be exempt from IHT. This means that, subject to various conditions, if you’re married or in a civil partnership, you could have a tax-free estate worth £1,000,000. Yet the simple fact is that IHT could be considered a voluntary tax. The Treasury relies on our inertia and reluctance to confront the issues of death and inheritance. To make things worse, the Treasury’s coffers are boosted at the exact time your loved ones least need the added hassle.

Help your family now: There are many perfectly legitimate ways to mitigate IHT through foresight and careful financial planning. You don’t need high-powered tax planning, just a willingness to discuss the issue, act and make use of the many options available. These include establishing trusts and making use of annual exemptions such as gifting. Bear in mind that if you’re domiciled, or resident, in the UK, IHT rules are complex. Certain transfers are deemed exempt from the tax if they pass between a husband and wife or civil partners.

If you would like some more help getting through the IHT maze, please do not hesitate to contact Peter on 01747 855554 and email peterhardingwm@sjpp.co.uk.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

SJP Approved: 28/03/2023.

Peter Harding Wealth Management is an Appointed Representative of and represents only St. James’s Place Wealth Management plc (which is authorised and regulated by the Financial Conduct Authority) for the purpose of advising solely on the Group’s wealth management products and services, more details of which are set out on the Group’s website www.sjp.co.uk/products. The ‘St. James’s Place Partnership’ and the titles ‘Partner’ and ‘Partner Practice’ are marketing terms used to describe St. James’s Place representatives.

Peter Harding Wealth Management is a trading name of Peter Harding Practice Ltd.

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Getting to know our team.

Name: Robbie Holman.

Role: Financial Adviser.

What’s the best bit about your job?

Helping clients understand their situation and giving them peace of mind.

If you weren’t doing this role, what might you be doing?

An MP’s assistant, as I did Politics and International Relations at university.

What do you enjoy doing outside of work?

Coaching Wimborne Rugby Club, playing golf and spending time with friends and family.

Tell us something about yourself that we don’t know.

I starred as Scooby Doo in a first school play.

Who was your childhood hero?

Phil ‘Raging Bull’ Vickery – what a prop

What’s your favourite film?

Saving Private Ryan – it makes me cry every time.

What’s your favourite holiday destination?

Zakynthos in Greece with my fiancé’s family

Give 3 words to describe yourself.

Trustworthy, driven, fun.