Inheritance tax

Curious_2026

Is it correct that as a single person with no children, that I will only have the £325,000 inheritance tax allowance? Seems that those inheriting my estate will be penalised for my life choices.

Woodstok2000

Everyone is penalised somewhere along the line….you've saved a lot of money by not having children, but other people's children will likely be the ones looking after you at some point (Doctors, nurses, financial advisors etc all come from somewhere).

If you are concerned, seek financial advice - there are lots of efficient ways to deal with inheritance tax even if you are unmarried and don't have children.

Keep_pedalling

It is correct, but you have the benefit of being able to spend what you like on yourself and nothing on any financial dependants.

It would be foolish therefore to live to a grand old age and leave a massive IHT liability. There is also plenty of ways to mitigate your potential liability, through gifting and insurence.

slinger2

It's been £325k since 6 April 2009 and is due to stay at that level until at least 2031.

katejo

https://forums.moneysavingexpert.com/discussion/6684799/inheritance-tax

You can reduce the 40% tax to 37% by doing a will and committing 20% of your funds to named charities. That's what I have done.

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82151299#Comment_82151299

It's better than that - the reduced rate is 36%, and you only need to commit to a minimum of 10% of your estate going to charity.

katejo

https://forums.moneysavingexpert.com/discussion/comment/82151302#Comment_82151302

I couldn't remember if it was 10% or 20% but think I did do 20%

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82151323#Comment_82151323

Perfectly sensible since everything you leave to charity is IHT free.

dunstonh

https://forums.moneysavingexpert.com/discussion/6684799/inheritance-tax

There is a natural desire to pass your wealth on to your children. That tax rules consider that. You don't have any children to pass your wealth onto. So, lack those desires.

Life is full of choices and consequences. Those with children would have given up some of their wealth to raise those children. You didn't and had more wealth for yourself. You would have had more opportunities to utilise tax allowances each year than a parent.

You can still avail yourself of the charitable donations and gift allowances.

Dead_keen

Is it correct that as a single person with no children, that I will only have the £325,000 inheritance tax allowance? Seems that those inheriting my estate will be penalised for my life choices.

Let's say I am married and pass my assets to the same people as you do. Will I pay more or less IHT than you?

bioboybill

It isn't only £325K. If you own your own home and pass that on there's another £175K, so you can pass on £500K each including a property. So for a couple it's £1m you can pass on. Obviously if you're single it's half, but that's your choice. And remember it's only the bit above that limit that gets taxed. Why worry. You won't be here! 😆