Hundreds of Families Face Surprise Inheritance Tax Bombshell

Many unsuspecting families could receive large bills after interpreting property giving rules incorrectly.

The complicated rules about giving property to loved ones may have left hundreds of families with unexpected inheritance tax bills, which could run into the hundreds of thousands of pounds.

According to London-based law firm Wilsons Solicitors, HMRC requested extra inheritance tax from 400 estates last year, amounting to a total of £111 million. That is an average of £277,500 for each of the 400 estates.

Wilsons says that the 400 cases include people who had given property to their adult children, but had continued to live in the residence. Because the individual continues to live in the property, it is considered a "gift with reservation of benefit" and is counted as part of the donor's estate for inheritance tax purposes.

This in turn means that the value of the property is taxed at 40 per cent, and is not exempt from the calculations as many wrongly believe.

If you need assistance with any aspect of inheritance tax or estate planning, call our team of experts today. You can speak to us on 0161 928 5558 or complete the online enquiry form to the right and we will call you back.

Collings Solicitors

Estate Planning, Altrincham