Having paid taxes all their life, many people think it unfair that any savings they are able to pass to their children on death are taxed yet again.
And “A little knowledge can be a dangerous thing” was never more apt than when applied to the ways by which some people try to reduce death duties.
We often find clients who have been advised in the past to give their own home to their children, even though the children no longer live with them.
Not only does such a gift rarely succeed unless specific steps are correctly taken, but it could result in an eventual double-tax charge.
Although the 2008 Finance Act changed the law to enable some widows or widowers to utilise unused inheritance tax allowances from their late spouse, this change was rather less generous than the then Chancellor of the Exchequer would have us believe.
Married couples have always been able to use both of their allowances on death by having tax-efficient Wills drawn up.
Single or divorced people are no better off now than before the law was changed, and the same may even apply to widows or widowers if their late spouse died before 1975.
At Michael Anvoner & Company we specialise in Wills Writing Services and Estate Planning.
We can explain to you in plain English how inheritance tax works and how it can often be avoided both on death and during your lifetime – not only on your own eventual death but in future generations too.
We recognise that every person has a different set of circumstances and different priorities.
We go through suggestions which are relevant to you, showing how tax planning can work, and what possible disadvantages have to be weighed against potential benefits.
Sensible tax planning in your Will and, if appropriate, by the use of lifetime planning can reduce or even completely eliminate inheritance tax for you and often for the next generation.
Although legislation over the years has reduced many of their benefits, trusts solicitors still very much have a place in this kind of planning.
If you wish to preserve the income your savings earn but would prefer the capital not to be taxed upon your death, clever use of schemes like ‘Discounted Gift Plans’ can allow this to be achieved.
H.M. Revenue & Customs have confirmed that these are perfectly legitimate ways of reducing your inheritance tax liability. As solicitors, we are not allowed to give advice on financial investments; however, we work closely with chosen specialist tax accountants and Independent Financial Advisers whose professional integrity we completely trust, and are happy to introduce our clients to these.
CONTACT US NOW, and we’ll happily answer any queries you might have.