Taxation Services
At Bates our advisers will carry out a detailed analysis of your
financial circumstances. From this an appreciation of your tax position
is also obtained. When looking at your financial planning, the effects
of taxation upon any recommendation can be weighed-up, and this will
help in the final choice. Inheritance Tax Planning
Download our free IHT Guide here
Once considered just a tax on the rich, the property inflation of
recent years has caused a huge percentage of personal estates to
exceed the Inheritance Tax nil rate band (£312,000 in 2008/9),
beyond which the estate is taxed at a staggering flat rate of
40%. For married couples, unused nil rate band can be transferred and
added to the surviving spouse, but this recent benefit alone may not
mitigate the whole IHT liability on second death.
For example, for a widow who dies owning a house worth £600,000,
cash and investments of £125,000 and other chattels of £25,000, her
estate could incur a tax bill of £50,400.
Or take a widower with a house worth
£500,000 and other assets of £300,000:- the tax bill upon death could be
£70,400.
If the surviving spouse does not have
the ability to apply the IHT nil rate band from their deceased spouse,
the above tax burdens would be considerably greater.
In many cases, some inexpensive tax planning, perhaps built
around a suitably drafted will, can reduce the potential tax bill
considerably.
For larger estates, reducing the potential Inheritance Tax liability requires some careful
thought. In many cases, total mitigation will involve divesting
yourself of some of your assets during your lifetime. There are certain allowances
and concessions which may be used, and you may prefer to gift assets into a
simple trust structure.
What is good for one individual is not necessarily good for another.
That is why we discuss your particular circumstances in such detail with
you before offering creative solutions.
We can advise on how to achieve your aims, and (where relevant) on
how to use types of trusts in so doing. Trusts are nothing to be
afraid of, and indeed can frequently be set up at no additional cost
when connected to a new investment of money. Most trusts allow you
a reasonable degree of control over the trust assets and their
disposition during your lifetime.
As Benjamin Franklin put it, "nothing is certain in life except
death and taxes". A rather more blunt reminder of the situation
might be to ask "who do you like more, your family or the
taxman?". Because you really can reduce the tax your estate (and
hence your beneficiaries) will pay. An hour or two spent now could save
your family £000's in years to come.
All of our advisers have basic
training in this area, and some are
specialists in it. Please do not delay in discussing your concerns with
us.
Not all of the above products or
services are regulated by the Financial Services Authority.
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