Eastenders storyline highlights the need for IHT conversations
The latest storyline in popular TV show Eastenders deals with an increasingly frequent issue for beneficiaries inheriting property.
Being hit with and Inheritance Tax bill sounds like something only the wealthy need to worry about. However, with average house prices rising by nearly 75% over the last over the last 10 years, but the IHT nil band rate remaining unchanged, more estates are incurring an IHT bill than ever before.
Average house prices in the UK are now nearly £300,000. With the IHT nil band frozen at £325,000 it’s easy to see how more and more people are finding themselves having to deal with an IHT bill.
This issue isn’t a frequent topic for discussion within the mainstream media, however fans of Eastenders are being made aware of this growing problem.
June Brown left the show in February 2020. Following June’s death in April 2022, the character Dot Cotton was written out of the show in December 2022.
Dot’s granddaughter Sonia, played by Natalie Cassidy, found herself with funeral arrangements to make whilst grieving the loss of her grandmother.
Sonia has now been faced with an increasingly common problem. She has inherited Dot’s house, but now finds herself with a huge IHT bill, with no means to pay it, and may have to sell the property as a result.
This is an all-too-common problem faced by more and more people and an important issue to highlight.
So what can you do to ensure you aren’t caught out by an IHT bill:
Have a conversation about inheritance
Make the time and space to have a conversation about inheritance with your family. It can feel uncomfortable to talk about inheritance, after all, the passing of a loved one and money aren’t easy topics to talk about. Having the conversation will help everyone to understand the financial situation, inheritance, and who will take responsibility to carry out the wishes of the deceased.
Get the right financial advice
Once you understand the inheritance wishes it’s important to get some good financial advice. There is a lot that can be done to plan for the transfer of wealth and understand any liabilities such as Inheritance Tax. This should ensure no surprises later.
Make a valid Will
Having a valid Will in place helps to ensure that wishes are carried out exactly as intended and can help avoid any potential arguments later. If there isn’t a Will in place, then the rules of intestacy apply to distribute the estate to the relevant family members.
Talk to the Executor
Someone needs to execute the Will and take responsibility for any arrangements; this is the Executor. You can have up to 4 Executors to ensure someone can take on the task when the time comes. It’s important that the Executors understand what they are responsible for. Along with making funeral arrangements, applying for probate, appointing a solicitor, etc. They are also responsible for all financial expenses including settling any IHT bill.
Talk about Inheritance Tax
Make sure that the financial advice and discussions with the Executor include Inheritance Tax. Any IHT liability must be settled before probate is granted, so the Executor must have a means to settle the bill before they can access other assets locked in the estate.
David Crooke, Head of Sales at Tower Street Finance said: “It’s good that the show is helping to highlight this growing issue. We have seen an increase in estates struggling to find a solution to settle an IHT bill. The freeze in the nil rate band and increasing house prices mean that it can come as a surprise that an estate has an IHT bill to settle.
“At Tower Street Finance we provide solutions to help Executors and beneficiaries access their inheritance before probate is granted. This means that IHT can be settled, unlocking the estate and the process can move along with no financial issues holding it back.”
Find out more about not waiting 12 months for your inheritance with Inheritance Advance, settling IHT liabilities with Inheritance Tax Loan or paying for a funeral, administration and property fees with Estate Expense Funding.