Bailing Out Your Kids Costs the Taxman a Fortune

THE Bank of Mum and Dad is denying HM Revenue & Customs millions of pounds a year.

More than a quarter of first-time house buyers are helped financially by friends and family. Money that parents planned to leave their children in their wills is actually being handed over long before they die.

Inheritance tax (IHT) is not applied if cash is gifted at least seven years before the donor dies. Research by the Prudential suggests that fewer than three people in ten, a drop from 50% five years ago, now expect to leave money in their wills.

Despite soaring house prices in recent years, the amount bequeathed will average £191,000 – which includes the valve of their home. That sum is far below the IHT threshold of £325,000, or £650,000 for a married couple.

But it’s not just for deposits on new homes. Researchers found that parents are now, more than ever, helping their little darlings pay rents and buy cars.

And that doesn’t leave much for the taxman. In fact, many parents are worried whether they’ll have enough left to cover their own retirements.

Find out how to protect your nest egg from the taxman by ringing Heritage Will Writing on 02380 879243.