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On the surface, IHT appears justifiable,...tax the dead. Beneficiaries will get reduced legacy for the benefit of the general public,... at least in theory. In practice I suggest most of what expected would be tax ends up with commercial finance enterprise/advisory groups instead of tax offices.
My thread comes about because my younger son thought I should open an a/c with a talking bank where I would get free advice on personal finances. So I made an inquiry and indeed a bank rep came to my home and we had a good chat.
He thought my £250k guess of the valuation of my home was £50k short. This directed my mind to IHT, but my visitor was reluctant to go into it. He wanted to put me in touch with a specialist adviser, I said I'd think it over and we parted on friendly terms.
Today's (3Sept2007)D Tel. Business front page has has an article which begins... "Lord Forte leaves slim pickings. Lord Forte, who made a multi-million pound fortune creating the Forte hotels group, left just £80,150 in his will, it emerged yesterday. The self-made man passed on his money to his family before he died, aged 98, in February..."
No IHT. Clearly he had top finance lawyers, but how did they do it, and how early?
"On the surface, IHT appears justifiable,...tax the dead"
Uh?? In truth the only people really being taxed are your heirs/children if you don't make proper provision to mitigate your IHT liability.
There's plenty of free advice available on the internet on how to reduce your liability and my wife and I have made provision in our wills.
Alternatively, any decent Independent Financial Adviser will help you make proper provision for a fee of three or four hundred quid.
And, no, I'm not a multi-millionaire - not even a millionaire - but why should my children suffer financially when I pop my clogs?
In the simplest argument, the money was taxed to earn it (income tax), and it will be taxed when spent (VAT, excise etc), so why does it need to be taxed at death?
Why should my money be taxed twice??
Paid the tax, ...die !! and its taxed again.
Good luck to Lord Forte.
Three times... someone will eventually spend it:)
It is rumoured that Mohammed al Fayed pays almost no personal income tax. How does he manage that?????????
a very large mattress?
Inheritance Tax has always been a voluntary tax, you only pay it if you want to, but it's very easy to avoid.
If you sign over your house & possessions to your relatives at least 7 years before you pop your clogs there is no tax to pay. obviously you need to know when you're going to die so you can do this 7 years previously, but if you add your children to your house deeds whilst you are still reasonably young you should be OK. Frankly once your house his dealt with the chances of the rest of your assets tipping your over the tax threshold is slight.
It can be very short sighted to dismiss IHT so quickly.
First of all it is one of the few taxes you don't actually pay. It is paid after you die on your estate.
Secondly the amount of money raised by IHT makes up a proportion of the cash needed to run the country. If IHT is stopped then that shortfall will have to be made up by increased taxes for everybody including those who would only have paid it on their estate after death.
Thirdly it is very easy indeed to avoid IHT without a financial adviser BUT it is only a polite way of describing tax evasion!
I dont think we dismiss IHT quickly, we try over YEARS to dismiss.
Name another Tax which is so wrong!
quote 'few taxes you don't actually pay. It is paid after you '
Its still my money until its safly given to my kids.
The comment 'polite way of describing tax evasion!'
leaves me speechless ( well perhaps not!)
WE have Paid the tax, But the goverment want to come back for a second 'grab'
I urge ALL to look at ways to advoid IHT.
(please read, Mother)
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