Common Mistakes

Inheritance Tax Common Mistakes

• It is often believed that you can gift your property away but live in it. This is a gift with reservation and will fail with everything falling back into your estate.

• You can transfer whatever you choose to your spouse on death as the gifts are exempt from IHT, but this can cause problems when the second person dies and wants to pass the wealth on to the children.

• Wills are often not reviewed on a regular basis for changes in circumstances.

• One trust may be more appropriate than another so seek advice from a trust specialist.

• It is generally believed that you can only give away £3,000 per year as a gift. In fact you can give away as much as you like from any surplus income you may have, as long as it is a regular amount and does not affect your usual standard of living.

People are often told to mitigate IHT by insuring against this. Whilst this is an option it does not mitigate against the tax, it just provides the funds to do this, and the IHT still remains. This doesn’t need to happen.

• Creating your own Will or having someone prepare it who is not a qualified solicitor. It’s easy to make a Will but there are a range of implications you should be aware of, which could catch you out, and potentially land you with a tax bill.

Contact Worldwide Financial Planning on 0800 0112825 or fill in the enquiry form and send to us for more information.