CashNews.co
Britons are being urged to be more open with loved ones about inheritance plans to avoid landing them with any tax “surprises”.
This comes following new research findings, that a significant number of Britons are being caught off guard by unexpected inheritance tax bills, highlighting the importance of discussing financial matters with loved ones sooner rather than later.
According to a study by Canada Life, 56 percent of UK adults who received an inheritance in the past five years did not discuss its value with the benefactor beforehand. This lack of communication is leaving many vulnerable to “surprises” when the time comes.
Nearly a fifth (17 percent) of adults have received an inheritance in the last five years, with the average sum being around £35,000.
However, for over half of these individuals—equivalent to 5.1 million people—the amount they received came as a surprise.
Only 12 percent of those who inherited knew exactly how much they would receive, while 31 percent ended up receiving more than expected and 26 percent less.
When it comes to managing their windfalls, a third (33 percent) of recipients plan to put the money into a savings account, while 19 percent aim to invest it for the future.
Others are looking to pay off debts (15 percent), renovate property (14 percent), travel (12 percent), or gift the money to children or grandchildren (12 percent).
Stacey Love, a tax and estate planning specialist at Canada Life, emphasised the importance of open communication about inheritance.
She said: “It is understandable that many people shy away from talking about inheritance. However, not having these important conversations means that those who are receiving can be caught by surprise when the time does come.”
Ms Love urged families to break the taboo surrounding financial and inheritance discussions.
She said: “Being open about your wishes and discussing any potential unexpected costs that may arise in the coming years, such as care costs, allows you and your family to take control and make necessary financial arrangements now that will help to ensure that you’re in good stead for the future.