A while ago we drew up wills for a company director who worked just outside London, and he was amazed to discover how much inheritance tax his family would have to pay if he died without making the appropriate provisions in his will. He asked if I would be willing to give a talk to his staff and run a clinic at their office for a day or two, so people could discuss their circumstances in confidence. I happily agreed, however his HR department couldn’t see the point - telling me that all their staff had access to the company legal department if they had a problem. “But what if they don’t know they have a problem?” I replied, “They will carry on in blissful ignorance until the day they die and then it will be too late to do anything about it!”

Unfortunately this is still the situation today, and as a result of this epidemic of “blissful ignorance” we see so much money going to the taxman unnecessarily. Most people don’t worry too much about inheritance tax because they think it only applies to ‘rich’ people.  But these days anyone owning their own home in and around this part of London may well be ‘rich’ enough for their assets to be liable for tax when they die. If these matters aren’t addressed when you’re relatively young and in good health then it may well be too late. Have you worked hard all your life just to hand everything over to the Chancellor when you die? I very much doubt it. 

The inheritance tax allowance currently stands at £325,000. Tax is paid at a rate of 40 per cent on anything in an estate over and above that amount unless passing to your spouse or to charity, but with proper planning this can be greatly reduced or even eliminated altogether. You could save your loved ones a considerable amount of money by the use of flexible wills, properly advised lifetime gifts and trusts, and by taking advantage of inheritance tax reliefs and exemptions.

If you have any questions about inheritance tax and how to avoid paying more than you need to, then write to me now at timesquestions@anvoner.co.uk and I shall do my best to put your mind at rest.