Do you want to leave your money to the tax man?
You've probably seen headlines about Inheritance Tax in the national newspapers. The tax on death has become an extremely expensive issue for a large proportion of the house owning public.
Yet a lot of us look at those headlines and picture people living in the South of England with houses worth about a million pounds thinking what has it got to do with us rather than assessing our own circumstances. The bitter truth of Inheritance Tax is that after your death, the taxman adds together the entirety of your estate and then charges 40% Inheritance Tax on the value above £300,000 (for the tax year from 6th April 2007 to 5th April 2008.) This includes your house, your car, your jewellery, your furniture and your money in the bank. Broadly speaking it is everything you own.
If you try sitting down and analysing your estate using these rules you might get a surprise. From the taxman's point of view you might be worth a lot more than you think.
The good news is that there is no Inheritance Tax to pay between married couples or registered civil partners. However if you leave everything to the survivor of you on the death of the survivor your family can get a large tax bill. However if you leave substantial amounts of money to someone else the survivor may not have enough to live the rest of their life in comfort.
The ideal solution is to leave the £300,000 tax free sum that each person can give away on their death in such a way that the survivor of you can have access to it but so that when they die the taxman can't count it as part of their estate and so cannot charge 40% tax on it.
We can help with this type of tax planning and can discuss other Inheritance Tax solutions with you. If you want to save your family money and prevent your hard earned money going to the taxman then call Claire Green or John Gill at Heptonstalls LLP Solicitors on 0800 9178267.