Introduction to IHT

“In this world nothing can be said to be certain except death and taxes”. So said Benjamin Franklin nearly 200 years ago.

In today’s political climate, a hot topic for point-scoring and party politics can be Inheritance Tax (IHT). In 2007 the government introduced major reforms to the inheritance tax (IHT) system hoping to steal the Tories’ thunder on the issue. But that was just when the credit crunch was starting. Certainly before the enormous scale of the economic downturn was understood, the level of public borrowing realised and the prospect of many years of belt tightening to come in the future, fully appreciated. The question of the future extra Taxes, how to raise them and from whom, is going to run and run.

This is not a new phenomenon and taxing people when they die (and coincidentally lose the right to vote) has been around for approaching a hundred years. Originally it was called Estate Duty from 1914 to 1975, then Capital Transfer Tax from 1975 to 1986 and more recently Inheritance Tax. Don’t be fooled into thinking it has always just been a tax on the really well off. 40 years ago tax was due on estates worth more than just £10,000! *

One of the big difficulties with Inheritance Tax Planning is not knowing when it is going to affect you and what the rules will be at that time. Whilst you can only plan under current rules, you can prepare for the future and make sure that you take steps to protect your family’s wealth.

The mistake people make all too often is they don’t think it will affect them and by the time it comes to be applied it is often just too late. In effect this may well be the first time they become 40% tax payers!

It can be a very complicated area and one where you may well benefit from taking Independent Financial Advice. You have worked hard all your life to build up your estate and already paid much in taxes, so to lose even more of it to the taxman on your death is indeed a waste.

To help you get started, there is a series of easy steps you can take to minimise and potential future problem and these topics are set out in the following pages:-

The Basics (what is Inheritance Tax, who pays it, and when is it due)?

Will it affect me (now or in the future)?

Gifting allowances (what are they)?

Wills and Trusts?

Estate Planning: - Protecting your family’s wealth.

Frequently asked Questions.

At Ashwood Law we have specially trained advisers who can help you every step of the way and as we have connections with so many Solicitor practices, who can look after the legal side of matters (through Wills and specialist Trusts), we can ensure that your family’s wealth can be as well protected as possible.

*source: HMRC website

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