One in five inheritances liable for inheritance tax

One in five inheritances liable for inheritance tax

A recent study by HSBC has revealed that one in five UK inheritances are likely to become liable for inheritance tax within the next few years.

The research, which included around 16,000 people in 15 countries, revealed that almost two thirds of Brits of retirement age expect to leave over £180,000 for their next of kin, with over 20% expecting to leave over £250,000 – the nil rate band for inheritance tax in England.

I question the realistic expectations of some working age respondents however, two thirds of those whom indicated that they expect to receive an inheritance of some sort, saying that they will use it to fund their own retirement.    It appears that under 10% of those aged 45-54 have this expectation, compared to over 20% of those aged 25-34.

It is unwise to consider falling back on a potential inheritance, to fund your own retirement.  None of us know what is around the corner, and our ageing parents may well need to use their savings and capital not only to support their own retirement, but to pay for nursing and care home fees, too.

Perhaps more realistically, less than half of respondents actually expected to receive an inheritance of any sort, although 69% of retirees plan to leave something for their next of kin.

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