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Keep Mr Brown at bay

From the archive, first published Thursday 26th Aug 2004.

Inheritance Tax (IHT) - still a voluntary tax, but for how long?

Setting The Scene

In recent years The Money Shop has been working closer than ever with other professionals on plans to avoid Inheritance Tax. Why? Primarily because property prices have risen to such an extent that many estates now fall into the IHT trap. Secondly, the firm has a natural aversion to paying - or our client's paying - any more tax than is absolutely necessary.

Of course, you may have a different opinion and may not want your offspring to receive all - or even part - of your estate. And of course you may not have any nearest and dearest you wish to benefit. Then perhaps you should consider gifting to charity. At least you will have made the decision about where your money goes, rather than it being decided for you by Mr Brown.

Plan and Control In Advance Of course, you may take the view that having worked hard for your money you see no reason why your children should not do the same. But again do you really want the capital you have accrued and which has probably been taxed at least once (or maybe even two or three times) being taxed again on your death ? The Money Shop believes that you should at least make the decision about where your money goes on death and why would you not want to have control over as much of it as possible?

It has often been said that there are only two things that are certain in life - death and taxes. The Money Shop can certainly help with Inheritance Tax which - in the main - is voluntary.

Methods and Options A huge range of options is available - despite the Inland Revenue's increasing threats and challenges - which includes the use of Discretionary Will Trusts (the I.O.U. or debt scheme for instance is extremely effective, inexpensive to set up and flexible). Investments can be placed in trust to fall outside your estate after 7 years. Certain investments will be 100% exempt after just 2 years. Other investments enable you to pass money into trust and to retain the right to funds as they mature, which effectively generates a regular income. And, of course, Life Assurance is still an excellent way of providing those who will ultimately pay the tax with sufficient funds to do so.

n So What Next? You may not think you have a problem. But to be sure, why not let The Money Shop review your position, explain the implications and give you all the options. Where appropriate, staff can also put you in touch with specialist professionals - such as a solicitor - to ensure that your will is drafted correctly.

Ring The Money Shop in Truro or Penzance for an initial consultation.

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