Inheritance Tax

What is Inheritance Tax? Quite simply it is letting the taxman use his shovel on your assets.

A statement by Lord Justice Clyde (Ayrshire Pullman Motors Services v Inland Revenue Commissioners 1929)

“No man in this country is under the smallest obligation, moral or other, so as to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores.

The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer’s pocket.

And the taxpayer is in like manner entitled to be astute to prevent so far as he honestly can, the depletion of his means by the Inland Revenue”

If your estate is above the ‘nil rate band’ exemption of £325,000 (in place to 2014/15) the tax man is likely to collect 40% of your estate above this figure. Married couples are entitled to transfer their ‘nil rate band’ on the first death to their spouse/civil partner under certain circumstances. Paying tax is a fact of life, but with some careful forward planning you can avoid or minimise the impact and that has to be a worthwhile task on your part.