Here we are at session number 89, and we’re going to be busting some common Inheritance Tax myths. These are comments, queries and misapprehensions that I hear all the time about Inheritance Tax planning. Hopefully I can address these and put them right, all in one place. Stay tuned…
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Inheritance Tax Myths
Inheritance tax is one tax which seems really to put people’s noses out of joint. There are lots of reasons for this, but a biggie seems to be that people object to being taxed when they die. This strikes me as a little odd as we seem to be relatively OK with being taxed when we earn money or make a gain, things which can be planned for just as easily. But anyway, inheritance tax being as emotive as it is, it make sense to deal with some of the major misapprehensions that I see all the time, so at least we’re dealing with it from a position of knowledge, rather than ignorance.
Click the big blue button for the transcript:
1 – The most you can give away is £3000 each per year, plus wedding gifts and gifts of £250
2 – You can give away your house to your children and continue to live in it and it can’t be used for long term care
3 – My kids will have to find the money to pay the tax
4 – If I give something away, the amount of the gift reduces over seven years
5 – A gift into a trust counts for the seven year rule
6 – Inheritance tax is double taxation
7 – Business assets are exempt from Inheritance Tax
Most of those sound OK, right? As is so often the case in personal finance, the answer to many of these is “it depends”. Most have some truth in them, but there are nuances and details which you need to know
What you need to do
1 – Use all allowances possible
2 – Consider Business Property Relief investments perhaps
3 – Spend some money and give it away now
4 – Consider Insurance to cover the Inheritance Tax bill
Resources mentioned in this session
Session 9 – Inheritance Tax and Estate Planning
Session 81 – Advanced Investing: EISs and VCTs
Session 79 – Financial Forecasting with Andy Hart
This week’s reviews
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News
Still at 15st 11lbs – trying to shift a few more lbs before Christmas!
Next Session Announcement
This is the last show before Christmas; next show on 7th January, where I’ll be talking to Graham Clark of moneystepper.co.uk about a great initiative he’s got going on to help people get their savings goals in place for 2015. Head on over to his site now and check it out, and sign up if you fancy it (I will be doing so) and we’ll be putting more detail on things on the 7th January
Huge thanks to you all for your support in 2014. Big things planned for 2015, including a new ebook due out very shortly and lots more things to come out of that. Join the mailing list on the homepage to be kept up to date about that.
I hope you have a great Christmas and a happy New Year. Stay healthy and solvent though this crazy season. For me I’ll be enjoying our first christmas in our new home and relishing my couple of weeks off. I’ll be taking some time to plan next year on all counts, with personal financial goals as well as business goals for Jacksons Wealth and MeaningfulMoney. I’ll be cherishing the time with the family and remembering the real reason for the season.
One goal in 2015 is to get more listener questions. If you have a financial query that you want answering here on the show, then the best way to do that is to leave me a voicemail at meaningfulmoney.tv/askpete
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