Keeping It Simple
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Inheritance Tax
 Voluntary
Tax
Liability for Inheritance Tax is certainly not
the preserve of the rich. Rising house prices put many many ordinary
people within the threshold of £300,000 (2008/9) . The total value
of your estate over £300,000 will be taxed at 40% on death.
The good news is that the tax is often entirely
voluntary if you arrange your affairs effectively.
Key
Stages
The key stages to effective IHT planning are to:
 Take
appropriate advice.
Act
sooner rather than later - this may mean making a will, gifting
assets, setting up trust funds, and or taking out liability insurance.
Review
your position regularly.
As a rule of thumb, the earlier the planning commences,
the great the chance of passing on your assets tax free to your
family and not the taxman.
Our
Approach
Our approach is to assist you in planning your
inheritance, taking into account not only your current assets,
but your future cash flow, and the wishes of yourself and your
family.
An effective IHT strategy may combine not only
taxation issues, but legal work and insurance. We therefore have
strong links in these fields and are able to co-ordinate a strategy
for you, or refer you onto the appropriate advisor for your needs.
Fixed
Fees
As with the majority of our services, we normally
work on a fixed fee so you know how much things will cost from
the outset. The first stage is to take a review of your affairs,
and discuss the best strategy for you. In many cases this could
be a simple as giving away some of your assets, and insuring any
surplus. In other cases quite complex trust arrangements might
need to be put in to play.
We can help you decide which is the best strategy
for your circumstances.
Common
Errors
Finally we would say that the two most common
errors in complacent estate planning are:
1. Assuming you can give away everything when
you fall ill.
Large gifts you make within 2 years of death will
remain fully in your estate. Gifts you make between 3 and 7 years
will remain in your estate on sliding scale. (Small gifts to the
value of £3,000 each tax year are exempt)
2. Signing over your main residence to your
children, and remaining in the property.
Not only will this remain in your estate for up
to 7 years as with other gifts, it is normally a "gift with
reservation of benefit" and will usually remain in your estate
for IHT purposes. If this wasn't bad enough, for capital gains
tax purposes the beneficiary will become liable for any gains when
the property is subsequently sold or transferred.
Please get in contact for
a free consultation.
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