Yes, you read the title correctly. This blog is going to tell you how you can massively reduce the value of the money you have saved and invested, it’s really easy you don’t have to do a thing.
Here’s the scenario: How would you feel if you invested £100,000 and it grew by 50% in 7 years? Pretty happy, I imagine now your investment is worth £150,000. Then the next day you cash in the investment and you only get £90,000. How do you feel now? Outraged?
This is what happened. You died, without doing any Inheritance Tax planning and Mr Taxman took £60,000 off your beneficiaries just like that.
When someone with an Inheritance Tax problem dies the value of their estate above the Inheritance Tax allowance threshold (which is currently £325,000) is subject to tax at the punitive rate of 40%!!
When you take into account the value of your house, all of your other assets plus your savings and investments a lot of people will have an estate worth more than £325,000 making the estate subject to Inheritance Tax.
As financial advisers we know that lots of people aren’t making the most of the financial planning opportunities that are available to us all. In the scenario it would have been possible to invest the £100,000 so it wouldn’t be liable for Inheritance Tax and potentially the whole £150,000 would have gone to your loved ones.
We strongly recommend that you assume nothing and get professional financial advice to protect the value of your estate from the taxman. If you are assuming that ISAs, because they are tax free will simply pass tax free to your beneficiaries this is not necessarily the case. They pass tax free to a spouse but not to children and the value is still included in calculating the value of your estate.
The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
Investors do not pay any personal tax on income or gains, but ISAs do pay unrecoverable tax on income from stocks and shares received by the ISA managers.
At Four Oaks Financial Services, our initial consultation is at our cost and our advisers are fully qualified to give advice on Inheritance Tax planning. Our Lichfield Financial Advisers will be delighted to discuss estate planning with you as part of a lifestyle financial plan. Contact our Client Liaison Team on 01543 401029 for more information or to make an appointment.
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