Estate tax planning and advice

For many retirees, estate tax planning is not an important goal. Very surprising when you consider that the Treasury in 2008 raised more than £ 4 billion in a tax that is often referred to as a "voluntary tax".

Why do people postpone inheritance tax (IHT) planning? According to impartiality.es, 74% of people were not informed!

Typically, the most important asset is the family home, and there are few simple and inexpensive ways to ensure it can be removed from inheritance. Capital release may form an effective inheritance tax planning method, but it is still tainted, in some eyes, with bad experiences from the past, before regulators established schemes that subsequently proved to have major potential drawbacks.

Many people start their estate tax planning process by taking out life insurance to cover any liability, but of course this depends on the costs involved, which are directly related to the safety of the elderly client. Age and poor health, therefore, would render it unaffordable.

The political impact on estate tax planning has also meant that action has been put on the back burner, but since the credit crunch will be felt for many years, any raising of the bar on IHT allocations now appears to be very optimistic. . IHT is the easiest tax to collect because the properties are not distributed until after the estate is granted, at which time a liability is paid to HMG.

One of the most common investment myths is the statement that Individual Savings Accounts (ISAs) are tax efficient. They are very efficient on income tax and capital gains tax, but they are totally ineffective when it comes to estate tax planning. With clients who have accumulated significant funds with ISA and its PEP predecessors. Reviewing the alternatives is a fairly simple process of removing 40% of the tax that would be taken from you hibah rumah.

The starting point is the review (or do!) Of the family will. This will ensure that, for a couple, both zero rate band rights are used to the maximum advantage, and that the properties go to the intended persons. The most recent celebrity example of this is Peter Sellers. His estate has now gone almost exclusively to the two children of one of his divorced wives, with no direct blood relatives. His own children received very small legacies because his will was not created to reflect his circumstances of the last days.