There on the back page was an interview with Luisa Zissman, the runner up from the 2013 season of the Apprentice. Whilst she's not the usual suspect that I would expect to be commenting on the UK tax system, her simplification of inheritance tax was both succinct and to the point. Quite right.
The Pharaohs made elaborate efforts to take their wealth to the next world but as Howard Carter and all of us know you can't take it with you. We work hard all our lives in our jobs or businesses hoping that our families will benefit, but if our individual estates are over £325K, the current nil rate band or £650K where a spouse or civil partner is utilising the transferable nil rate band, H.M.R.C. could take 40% of the amount over these figures to Inheritance Tax. Ouch!
It has been said that Inheritance Tax is a voluntary tax and there is a well developed advice sector often targeting the high net worth client but there are some simple steps everyone can take, here's three of them.
- To keep the proceeds from any claim against a life policy outside your estate, make sure you have checked whether placing the policy in trust for your beneficiaries, is appropriate.
- Make a will and consider the advantages that will trusts offer for estate planning.
- Quite a substantial part of your estate could come from a pension fund, does this need to be added to your spouse's estate - is it worth talking to your financial planner about a spousal by pass trust?
Keep it in the family.
The Benefits of using a Financial Planner