John Locke said, “Every man should be entitled to “life, liberty and property.” That I learnt whilst studying Politics at University.  To this, my parents told me “work hard and watch the rest follow”.

Buying a house is a dream we all have – the white picket fence that secures us in life. But with the increasing property rates, this dream is becoming a distant reality for many what with the increasing prices in our day-to-day costs. So if we do manage to buy that house and pay off the mortgage that comes with it the last thing we want to do is gift our children a debt rather than an asset.

According to government reports, in the 2014/15 tax year, everyone is allowed to leave an estate valued at up to a £325,000 without their beneficiaries paying tax on it. When you die, the Government assesses how much your estate is worth. This includes the cash you have in the bank or in investments, any property or business you own, vehicles – even payouts from life insurance policies. It then deducts your debts from this to give the value of your estate. If this exceeds the inheritance tax threshold of £325,000 set by the Chancellor, you (or technically your estate) will pay tax at 40% on the amount over and above the threshold when you die. This is reduced to 36% if you leave at least 10% to a charity.

So for example, if you leave behind assets worth £500,000, your estate pays nothing on the first £325,000, and 40% on the remaining £175,000 – a total of £70,000 in tax – if you’re not leaving anything to charity. This can be seen as a lot by people especially if you have worked all of your life to build properties for your family to enjoy and maintain as the family home.

When I used to work in a Bank I would always advise any of my clients who had a property to make a will. It is perhaps the most important thing you can do to protect your assets.

Alongside making the most of your tax free allowances such as ISA’s, you can always pop into your local branch to find out more and if you wish to invest more, most Bank’s offer advice where you can put more money into tax free plans that may be useful to you.