Are you a million-heir? Swathes of millennials are in line to receive big estates

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Inheritance tax planning is very important, experts stressed (Source: Getty)

Huge numbers of Britons can expect to inherit more than £1m from their parents – but will face a chunky bill from the taxman in the process.

A survey released today suggests one in 25 people will receive estates of seven figures or more. And one in 50 can expect to inherit over £5m.

Rising property prices and stock markets have led to a big rise in the wealth of Britain's baby boomers.

But wealth passed down can cause a big cash flow headache for recipients. An inheritance of £1m could attract a tax bill of £230,000, retirement planner Canada Life said – roughly equivalent to the price of an average UK house.

“People’s expectations are likely to be substantially wrong without financial planning, and it’s quite likely they could lose substantial amounts of money in tax," said Canada Life head of distribution services Karen Stacey.

“For people expecting around £500,000 or more in inheritance, there is still a danger of losing tens of thousands of pounds in tax."

Read more: Philip Hammond has ordered a review of the "complex" inheritance tax system

Millennials

A separate report at the end of last year concluded millennials will benefit from the biggest "inheritance boom" of any post-war generation.

Record sums will be left to the children of Britain's baby boomers, think tank the Resolution Foundation found. But they will have to wait to an average age of 61.

"While the millennials have done far less well in accumulating their own assets, they are likely to benefit from an inheritance boom in the decades ahead," said Resolution senior policy analyst Laura Gardiner.

Read more: Here's why Sir Philip Green just moved up the rich list rankings

 

Tags: Tax