Inheritance Tax Planning
"To the Inland Revenue I leave a substantial slice of what I have spent a lifetime working for…"
Make your will read "I leave everything to my family and nothing to the taxman"
We spend much of our lives striving to better ourselves. We seek promotion, a move up the housing ladder and provide the best education for our children.
Care is taken to avoid tax on savings and investment or to ensure that we are making the most of the tax reliefs available in private or business life.
All of this is done with twin aims in mind, maximising income and accumulating wealth. It’s ironic that we spend so much time building up capital to pass on to our children and then spend so little time ensuring that they get what is rightfully theirs.
The spectre of inheritance tax could jeopardise plans for passing on your wealth to children and grandchildren. Naturally you want to choose for yourself who will inherit your estate and few people would select the taxman as their heir by failing to take proper advice and planning ahead.
Your beneficiaries could inherit the onerous problem of footing the bill. If there is insufficient cash they may have to sell the family home, business or other assets, just to pay the tax.
Not planning ahead is tantamount to agreeing that your children should write a large cheque to the Inland Revenue. It’s not what you make, but what you keep that is the single best definition of what wealth preservation is all about.
Having spent a lifetime accumulating wealth the good news is that you can protect it by taking measures to drastically mitigate inheritance tax if not circumvent it altogether.
This involves asset reduction and asset conversion. The former reduces the size of the estate by spending more or making lifetime gifts combined with a seven year life assurance policy in case you don’t survive that period.
The problem here is once spent or gifted you have lost control and access to your capital.
Control and possibly access may be retained by using trusts. The type of trust selected will depend on who you wish to benefit, the level of control and access to income and / or capital you want to retain.
Asset conversion involves converting assets within your estate which don’t qualify for inheritance tax relief into assets that do by investing in schemes specifically structured to qualify for such relief.
Anstey Financial Planning will help you select the most appropriate method and achieve your objectives of retaining your wealth for the benefit of your chosen beneficiaries by ensuring you don’t make unnecessary gifts to the taxman.
“Don’t leave your goodies to the baddies.”
The FSA does not regulate advice on taxation