“As a grandparent, have you considered investing in your grandchild’s education instead of paying 40% inheritance tax?” asks the website of fee-paying Bolton school, suggesting brightly that it’s one way to “leave a worthy bequest whilst avoiding giving away lifetime earnings to the taxman!”īut wealth transfers aren’t confined to the rich. In wealthy families, these can be part of a carefully crafted strategy to reduce death duties, often funnelled into property or school fees. Around £5.5tn in total could flow down through families over the next 30 years, both in conventional legacies and increasingly in living gifts like Isobel’s, which don’t attract inheritance tax if the donor survives for seven years after handing them over. By 2047, they estimate that number could more than treble.
By 2025, £100bn – more than half the annual budget of the NHS – could be changing hands every year, according to a landmark analysis commissioned by estate administrators the Kings Court Trust. “It doesn’t feel fair – and it makes you feel guilty.”īritain is entering a golden age of inheritance, as the trillions accumulated by the postwar baby-boom generation begin trickling down to their children and grandchildren in what’s been dubbed the great wealth transfer.
It was awkward, she admits, when they started holding Zoom meetings from home during the pandemic and everyone could see where she lived. Although she couldn’t be more grateful for her parents’ life-changing generosity, like many recipients of family money, she isn’t comfortable discussing it publicly Isobel isn’t her real name and she hasn’t been upfront with colleagues about how she came to buy a house so young. “When I think of the money that’s gone into that pension, it just starts a whole cycle of privilege over again,” Isobel says. They helped her buy a house in London when she was 27, and paid off her student loan when she was 22, so she could start saving for a pension. Isobel’s parents inherited legacies from their own parents in their 50s, which helped them pass on “living gifts” to her. It’s not the first time family money has helped her out. So she and her partner gratefully accepted their offer. “I didn’t have to think about how much it cost, which really took the pressure off.” The pandemic had also made her acutely aware of her parents’ mortality, worrying they might not live to see any grandchildren. “I’m so grateful to have been able to rattle through it at the speed we did, when I know friends have taken big gaps between IVF rounds because they had to save up,” says Isobel, who works for a London-based charity. Her parents are “amazingly excited” about meeting their first grandchild, not least because they funded Isobel’s fertility treatment – as is the case for an estimated one in eight British couples needing IVF – meaning she and her partner could throw everything into trying to conceive, undergoing several treatment cycles in quick succession. But, miraculously, the fourth round worked, and when we speak she is weeks from giving birth. After several heartbreaking miscarriages and three gruelling rounds of IVF, she had begun to worry that, at 34, she was running out of time.
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