'In this world, nothing is certain but death and taxes.' Benjamin Franklin
Inheritance Tax is a very controversial issue in the UK; a deeply unpopular and many feel, unfair tax, levied at a highly sensitive time in people's lives and whilst Franklin made this statement at least partly in jest, he does help to make a serious point in respect of Inheritance Tax planning.
Namely, if you possess a large amount of assets, at a level in excess of the prevailing nil-rate Inheritance Tax band, you can be certain that unless you take action Her Majesty's Revenue and Customs will become one of the beneficiaries of your estate, no matter how intensely you dislike the idea.
Many people do not realise their estate may have a liability to Inheritance Tax because it is still widely perceived to be a tax paid only by the very wealthy. However, with the surge in personal wealth in recent years, precipitated often by soaring house prices, huge numbers of people must now consider the tax implications of their estate.
Furthermore, it must also be appreciated just how punitive the tax can be; 40% on all assets above the prevailing single or combined nil-rate band, which, put simply, means that an individual with an estate of £500,000 who dies in the 2009/10 tax year could leave behind a tax liability on death of £70,000.
Like the majority of people, we would not like to think of our families receiving a reduced bequest or facing a large tax bill upon our death as a result of the Inheritance Tax laws. Therefore, we understand our clients' feelings and concerns on this issue and are committed to helping them mitigate their family's potential liability.
We seek to ascertain the nature of your estate and the extent to which there may be a tax liability and after talking matters through with you, will then consider what actions may be required and how best you might utilise the available options.
This may include liaising with solicitors and accountants, since we feel a successful Inheritance Tax mitigation strategy can often involve a professional legal, taxation and financial perspective.
We will help to develop a strategy to enable you to make the best use of your assets during your lifetime, whilst making provision for their subsequent distribution in the way that you would wish. Wherever possible, we will explore legitimate avenues for reducing the pernicious effects of Inheritance Tax.
Please feel free to contact us if you feel you would benefit from working with Chamberlyns.