Financial services technology provider EV has added inheritance tax functionality to its end-to-end financial planning solution EVPro.
The new functionality will provide advisers with an IHT liability illustration based on the immediate death of an individual or of both people in joint cases. It will enable advisers to factor in charitable donations, which are exempt from IHT and can also reduce the tax rate paid from 40% to 36% if 10% or more of the estate is donated. Historic gifts can also be added to take into account the seven-year role for Potentially Exempt Transfers in the liability calculations.
The decision to add IHT functionality follows the Chancellor’s recent announcement that the IHT threshold will be frozen at £325,000 until 2030, which coupled with rising property prices will see more estates face an IHT bill.
Ashley Staples, product director at EV, said: “The IHT threshold has been frozen at £325,000 since 2021 and in that time, tax receipts have increased by 41%, according to the latest HMRC figures, while over the last ten years they have more than doubled, driven by rises in assets, particularly property prices.
“However, although the headline marginal rate for IHT is 40%, tax-free allowances, exemptions and reliefs reduced the average effective tax rate for taxpaying estates to 13% for the tax year 2021/22. With more people being pulled into paying IHT, EVPro’s new functionality gives advice professionals a comprehensive and realistic view of their client’s tax liability and the value of assets that can be passed on to beneficiaries, which is critical to effective estate planning and intergenerational wealth transfer.”
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