Inheritance Tax Planning

After you've gone, take control

Certainty? In this world nothing is certain but death and taxes.

Benjamin Franklin

While true, there is much you can do to mitigate the tax burden on your family and heirs when you pass on. You've worked hard all of your life and will want to leave as much as possible to those you care about, rather than the tax man (who, don't forget, will probably already have taxed this money once).

Some inheritance tax facts: Surviving spouses can bequeath up to £650,000 tax free but, if you're not married, the limit is only £325,000. In either case, tax is levied at 40% on the remainder of the estate. Not married means single people, divorcees, and even couples in long-term cohabitation.

While your passing might be one of life's certainties, here are seven deadly wins to kill-off as much inheritance tax as possible:

  • Value your estate - assets less debts to determine your overall liability
  • Make a will - formalise your wishes as, without a will, the state decides
  • Minimise the value of your estate - make lifetime gifts where possible to reduce the value at death on which tax may be due
  • Marriage - gifts between spouses are exempt
  • work out how much income you'll have when you retire.
  • Tenancy - joint tenants or tenants in common can pass-on their share of a property
  • Investments - certain assets qualify for instant discounted tax relief
  • Trusts - a way of removing assets permanently from your estate

If you make any money, the government shoves you in the creek once a year with it in your pockets, and all that don't get wet you can keep.

Will Rogers