Unaware of the Rule: Thousands of Families Forced to Pay Inheritance Tax
Gifts to Grandchildren and Children Come Back to Haunt Families with Inheritance Tax Bills
Telegraph says that many families are shocked when they learn they need to pay estate tax after a loved one dies. This is taking place because they gave gifts to their kids or grandkids without knowing there was a rule. The rule says that if you give something away before you die, it may still be charged because it is still part of your estate.
The government says that 1,300 people had to pay inheritance tax on gifts they got from a loved one in 2020-21. In 2011–12, 590 families paid estate tax, so this is a big jump. People are giving their money away to their kids to help them buy a house or so they don’t have to pay too much in estate tax.
Experts Warn of Inheritance Tax Crisis: Families Struggling to Pay Bills
Experts are worried because some families might not have enough money to pay the inheritance tax bill. Ian Dyall from Evelyn Partners said: “What will happen to people who left money to charity but didn’t live long enough for the estate to get anything from it? He thinks that more wealthy families are giving away their money to help their kids or grandkids, but they don’t know that this could cause problems with inheritance tax.