Do you love the taxman more than your family?
Seems like a stupid question, but through inheritance tax and a lack of foresight many people unwittingly share their hard earned assets between the taxman and their family when they die. OK, kids can drive you up the wall and maybe into an early grave at times, but even so when did the taxman do you any favours?
Why, then, would you leave him 40% of the assets that you have worked hard to build up over a lifetime (bearing in mind that you will almost certainly have been paying him at least 20% of your earnings every year along the way!). Poor kids - especially when there’s more than one - as they could share 60% and each get less than the favoured beneficiary - Mr Taxman. It’s enough to give them an inferiority complex!
It’s not as though the taxman is worse off than your kids, in 2009/2010 people left him £2.4bn when they died. So why do I say that many people choose to share their assets between the taxman and their family on death? Well, because they choose not to take action to reduce their inheritance tax liability. In the worst case scenario they do not even know they have an inheritance tax liability. Yet it can be quite straightforward to reduce or get rid of this tax altogether.
Clearly they have not been speaking to the right people. It does not have to be risky, it certainly is not against the law or breaking any Inland Revenue rules, and you do not have to give up access to your assets. The first step to disowning the taxman and leaving everything to your wonderful family is to have a friendly conversation with an independent financial advisor who can help you to identify if you have a problem and make an educated choice about possible solutions. Or will you choose to let the taxman become your favoured beneficiary.
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Guest Post: Julie is the director of Pen-Life, financial planning practice which provides independent, no-nonsense financial advice from Yorkshire. We advise private, corporate and trustee clients throughout the country on insurance, investments, pensions, long term care and inheritance tax. You can also find her on Google+ and Twitter.