- AuthorDavid Feakins
It has recently been suggested that the so-called “Baby Boom” generation (those born between the 1940s and 1960s) are enjoying a higher level of income and wealth than any other generation born before them. Undoubtedly a great achievement, but some have argued that this has come at a price for the younger generations.
Whereas the Baby Boomers were lucky enough to see house prices soar, the younger generation are now struggling to get on to the housing ladder altogether. Studies have shown that at age 30, those born in the early 1980s only have half the wealth of those born a decade earlier at the same stage. For someone who was born in the 1990s, this statistic worries me.
However, there is a way in which the Baby Boomers can assist the younger generation whilst maintaining a benefit for themselves and this is by making gifts to younger family members – and this isn’t my way of trying to swindle a little pocket money out of my grandparents!
In the current economic climate, making gifts to younger family members actually makes a lot of sense. With the value of the Baby Boomers’ estates getting higher, more and more people from this generation are being caught by Inheritance Tax. The latest statistics showed that the Treasury collected a momentous £4.6 BILLION in Inheritance Tax receipts last year alone.
Once your Estate is caught by Inheritance Tax, 40% of anything above £325,000 (or £650,000 if you are a surviving spouse and everything was left to you on the first death) is paid to the Treasury. As I am sure you can guess, this can add up to quite a substantial amount.
If you want to know more about Inheritance Tax and the way that gifts can help mitigate any tax that may be due from your Estate, the Wills, Trust and Probate team can help. We work hand-in-hand with our specialist Independent Financial Advisers who can offer tailored advice to suit your needs.