The great IHT swindle

There is a great con going on. The government tells us that only a small proportion of estates suffer inheritance tax. That is true. What it does not tell us is how many estates of people who have not yet died are going to be subject to inheritance tax and that is scary. inheritance tax starts above an estate value of £300,000. Unless a married couple organise themselves properly that is £300,000 per couple. That takes into account your house, your investments, your life insurance, your pension funds (unless you sorted that out properly), all your tax free investments, everything. So although the figures may be a tiny percentage now, this is going to get really serious and a huge proportion of the population will be subject to inheritance tax. Now this tax is really easy to avoid or at least reduce. Just getting your Wills to say something other than “everything to the other” but instead using a discretionary will trust, will save the family £120,000! All you think of is property investments, wring your hands and say what about the capital gains tax (assuming you remember that there was capital gains tax in the first place?) could sell and re-invest in CGT/IHT effective assets. Okay it may be risky but at least you are burying two taxes straightaway. For those with big share portfolios with the same worries again, reinvestment is straightforward that is not to say it is not risky but if you do not do anything you will certainly lose 40% - how much of a risk is that? For those with a high income making regular gifts makes a difference. Even though without a high income but some spare cash use the annual gift allowance and give away £3,000 (plus £3,000 for last year if he did not do it). Just do not let inertia in the government’s big con – the headline rate of historic estates - let your family suffer a tax charge of 40% on anything over

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