Families could miss out on thousands via unclaimed inheritance – are you due windfall?


A huge 7,090 estates remain unclaimed, figures obtained from the UK Government’s treasury solicitor shows. The median amount of inheritance received by individuals is £11,000, data from the Office for National Statistics shows, suggesting there could be a significant amount of money unclaimed. Investing Reviews, the company behind the research, has analysed the names of those who have left UK estates unclaimed to discover the surnames which are able to claim the most in undisclosed British property.

At the bottom of the list were the surnames Johnson, Thomas, Kelly and King. The last names had 29 unclaimed estates each.

With more families able to get the most from their inheritance, many are looking for guidance on avoiding the costly tax often imposed on those who are given money after their loved ones have passed away.

Inheritance tax (IHT) is levied on the estate of someone who has recently passed away, which includes their money, possessions and property.

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No IHT is paid on an estate if the value of it is below £325,000, or if the deceased leaves everything above this threshold to their spouse, civil partner, charity or a community amateur sports club.

If someone’s estate is valued as being below this threshold they are still required to report it to HMRC.

By leaving their home to their children or grandchildren, a person’s inheritance tax threshold rises to £500,000.

Kirsty Thomson, financial planner at Brewin Dolphin, explained how the post-pandemic economic landscape is affecting families and their perspective on inheritances and IHT.

Ms Thomson said: “We have seen a noteworthy rise in the number of inheritance-related enquiries since the COVID-19 pandemic began – partially driven by people being made more acutely aware of their mortality but also because of IHT allowances being frozen.

“As asset prices rise, the number of people the IHT threshold affects is beginning to increase as well – the standard ‘nil rate band’ has been held at the same level for years now, which is effectively a cut in real terms.

“Every individual starts with a £325,000 IHT tax-free allowance.

“The residence nil rate band was introduced a few years ago to allow a further £175,000 tax-free allowance to be applied to the value of the family home, provided it is gifted to children or grandchildren.

“This effectively means you can pass down £500,000 of assets as a starting point – or £1million per couple, assuming that the surviving spouse inherits on the first death.

“Once an entire estate is valued at £2 million, the residence nil rate band tapers by £1 for every £2 of excess, so the wealthiest families are unlikely to benefit from this additional relief.

“£2 million may sound like a lot of money, but with house prices going through a significant growth phase during the pandemic, it leaves more people with decisions to make on inheritance.”

Anyone looking to save money on their Inheritance Tax bill is encouraged to seek guidance from a professional as soon as possible.



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