25 October 2023
Quilter has today announced the launch of its inheritance tax calculator, a tool that allows advisers to calculate how much inheritance tax (IHT) their clients will pay when they die based on their personal financial circumstances, existing assets and liabilities.
The tool also allows advisers to model a series of lifetime gifts made by their client to illustrate any potential IHT saving it could have on their estate.
The inheritance tax calculator is available to financial advisers on the Quilter website and aims to support their conversations with clients, particularly following the marked increase in speculation around the future of the tax.
The addition of the inheritance tax calculator represents part of Quilter’s ongoing commitment to support financial planning conversations between advisers and their clients, while also streamlining their processes, by regularly upgrading the resources available to them.
Shaun Moore, tax and financial planning expert at Quilter, says:
“Inheritance tax can be an incredibly complex area of financial planning, and an increasing number of people are set to face hefty IHT bills. There have been persistent rumours surrounding the fate of inheritance tax, making an already complex topic that much more difficult to navigate, so our inheritance tax calculator has been designed with advisers and their clients in mind to support their conversations and the planning process.
“At the very least the government would do well to simplify aspects of inheritance tax at a fiscal event before the next election. The residence nil rate band (RNRB), for example, is fiendishly complex, poorly understood and causes confusion for those navigating inheritance tax. A far simpler approach would be to scrap it and increase the nil-rate band, which could be beneficial for a larger number of estates.
"Another good middle ground that not only would help people mitigate inheritance tax but also help more money cascade down generations would be to revise the gifting laws that are currently frozen in time. By updating the annual exemption to reflect current inflation, individuals would be incentivized to make more lifetime gifts, promoting a smoother wealth transfer across generations, which would be very welcome during the current cost-of-living pressures. A balanced approach, such as adjusting rates and thresholds or simplifying gifting laws, could offer a pragmatic solution to address the concerns of taxpayers and promote a fairer system of wealth transfer in the UK.
“While there could be change in the future, ultimately the best course of action is to plan for the here and now, following the rules as they stand today. It is vital that clients are made aware of how much they stand to lose to the taxman, potentially unnecessarily, and are given ample opportunity to assess their current IHT situation to allow them to take steps to improve it where possible.
“Our inheritance tax calculator and lifetime gifting tool will support advisers in their conversations with clients by clearly illustrating how much they will pay when they die based on their personal financial circumstances. This will help them make well informed decisions when it comes to making lifetime gifts, not only in terms of how they can best support their loved ones, but also how much they could save in inheritance tax.”
