Kent may be famously known as the garden of England while Manchester has traditionally claimed the title of the UK’s industrial capital. Last week, our very own Guildford joined such ranks to be crowned the UK’s Inheritance Tax (IHT) capital highlighting the area’s urgent demand for expert planning and recommendations around this ever-complex area of taxation. Montfort's Alex Norwood and Rob Gow further discuss...

Located on the doorstep of bustling London yet in the midst of some of the UK’s most-idyllic rural scenes, Guildford and its wider Surrey area, has long attracted high-net worth individuals in their droves. Seeking a lifestyle that has it all, Surrey is especially popular with stockbrokers, bankers, accountants, lawyers and hedge fund managers, while not shy of the odd premiership footballer or two. Neighbouring Surrey towns including Weybridge, Oxshott, Cobham and Esher, often dubbed the UK’s answer to Beverley Hills, further joins Guildford as some of this country’s top hot spots for the wealthy.

It’s perhaps unsurprising that as many as 658 Surrey-resident families were subject to the tax in 2015/16 with the average IHT bill totalling a staggering £231,000 for each family. Commonly and otherwise known as a tax for the rich, IHT is a tax on the estate (the property, money and possessions) of someone who has died should their estate be valued in excess of the £325,000 (per person) threshold. Married or civil partners who may pass on their allowance are not liable unless their estate is worth more than £650,000.

After Guildford, families living in south west London, and affluent places such as Wimbledon, Chelsea or Richmond, were the next most likely to pay IHT. The data, following a Freedom of Information (FOI) request from Direct Line Insurance, detailed the highest IHT bills were paid by families living in west London where IHT bills averaged £390,000. Such IHT hot spots include Kensington, Hammersmith, Holland Park, Notting Hill and Bayswater.

With the UK a country of old money and a nation globally renowned to sweep things under the rug, IHT repeatedly prevails as the tip-toeing white elephant in any family discussion around money. Time and time again, IHT is unaccounted for with specialist recommendations by an expert financial advisor or tax consultant unexplored. In the event of sudden death, the implications can be devastating and come too late to allow for any provision. All further amplified at a time of loss.

“IHT must form a key component in any financial plan with it vital for not only the individual who may instigate seeking recommendations, however also for any family members likely to be affected”, comments Montfort advisor and pension transfer specialist Alex Norwood.

“Montfort is located in the Surrey Hills, only three miles from Guildford. These figures are therefore very poignant to our local client base. The trend we see is that people are aware of IHT, however, not of its financial severity and particularly for where their family’s estate is of great worth; all too-prevalent in this area. There’s often not that much communication within families around wills or the estate family members are set to financially inherit. A naivety thus occurs around the IHT implications where many assume they can navigate IHT without professional recommendations, or they’ll "approach it when it happens". When this realisation occurs too late, the repercussions can be catastrophic”, Alex continues.

“We must also consider younger generations, such as millennials, for which IHT can be a completely alien concept which families and the industry must seek to address together. Where people are starting families much later, IHT will start to become a concern and reality for those in their thirties, in comparison to years ago when it was only considered by people in their fifties. Yes, people are living longer however the tolls of modern life can also ensue early, unexpected death and thus unexpected IHT.”

As financial planners providing recommendations for both UK-based clients and also those considering emigration or who are already expatriated but, in the UK, IHT can be further unbeknown.

“Globally, the UK’s IHT as a taxation regulation is unique with very few other countries having similar taxation rules in place”, says Alex.

“The US of course has its Estate Tax, while France, Belgium, South Korea, Japan, the Netherlands are other countries with their own structures, however we’re talking about 10 – 20 countries in total out of the world’s 195 and so generally, it is an unfamiliar concept that expatriates are unaware of when they permanently relocate to the UK”, states Montfort level-four qualified paraplanner Rob Gow. “As ever, the financial complexities such as IHT, Capital Gains Tax (CGT), Lifetime Allowance (LTA) to name but a few, can magnify for those with cross-border circumstances.”

Montfort prides itself on its expertise and specialism surrounding complex taxation matters, notably IHT, and how varying taxation laws can make planning a challenging task.

“We have a fantastic team at Montfort highly skilled to impart tailored recommendations to an individual’s unique circumstances. Our specialism lies in complex tax cases and thus we regularly attract high-net worth clients seeking the very best advice, owing to our technical excellence but also our Home Counties location with many of us born-and-bred in and around Surrey. I was born in Belgium, yet grew up in Surrey and so I can appreciate the concerns those with global circumstances may have”, comments Alex.

“Our team is also second-to-none with chartered financial planners, experienced financial advisors, pension transfer specialists, investment specialists and expert tax agents. We recently recruited an ex-HMRC pension taxation specialist to provide the highest level of support and recommendations to complex cases and their taxation requirements. Montfort’s unrivalled technical knowledge around tax planning is largely attributed to its staff, considered one of the best in Guildford and Surrey, but also within the UK”, concludes Alex.

With the light on IHT, shining particularly bright on Surrey, these recent figures and press surrounding it will hopefully further highlight the importance of engaging professional advice surrounding IHT that should be considered sooner rather than later to ensure future financial goals and security.


To further discuss tax planning and your IHT concerns with a member of the Montfort team and to set up an initial consultation, contact Montfort by calling +44 (0)1483 202072 or email info@montfort-intl.com; montfort-intl.com


Guildford photograph © Neptune

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