According to the latest survey from Time Investments (20/4/21 – FT Adviser) over half of over 55’s has no idea whether they have an Inheritance Tax bill, or what it might be.
The survey asked over 1,000 people for their understanding and 52% said they had no idea assuming that it only affected the wealthy.
The Inheritance Tax has spiralled over the last few years and stood at over £5 billion in 2020.
The Inheritance Tax allowances have not changed for over 10 years now, despite increase in the value of assets, in particular house prices. So, it’s as important as ever to get advice and ensure that you and your family are in the best position you can be.
There are other considerations to take into account beyond what tax your beneficiaries may have to pay on your estate.
For example, the increasing ownership of cryptocurrencies and other digital assets means that these have to be considered. And its not as simple as you might think. Legally, cryptocurrencies are not assets (in the traditional sense, like money or property). They are actually classed as information, because the information contained in the digital key is required to unlock their value. (See our other articles about the risks and value of cryptocurrency generally).
A good start point would be to write the inheritance of the cryptocurrency into your Will so that it is officially documented. But this is not guaranteed to stand any legal tests. Most cryptocurrency assets are considered non-transferable which creates a strong legal barrier.
The same is true for any “information”. This includes the contents of digital accounts, for example e mail or Apple accounts storing personal data. Whilst this may not have a significant monetary value, it may have significant sentimental value. In these circumstances it would be a good idea to include passwords and access permissions in writing in your Will as well.
It’s not just as simple then as knowing whether you have an Inheritance Tax liability, there’s much more to think about.