24 June 2012

Inheritance Tax Strategy 2 - Spend It

Spending your money on yourself during your lifetime is by far the most effective IHT-saving strategy.  Every pound you spend is money out of your estate straightaway, and (with inheritance tax at 40%) saves 40p in tax.  The Inland Revenue cannot challenge it.  There are none of the other tax complications you get with trusts.  You do not need to survive seven years like you do with a gift.  You do not need to fulfil any technical rules like you do to get Business Property Relief.  The money is out of your estate, and that’s all there is to it.

You have worked hard for your wealth and have earned it.  If you are in a position to enjoy it, then you should do so. Go on a cruise. Have your home adapted to suit your health needs.  Employ a companion, or a nurse. Buy depreciating assets like yachts and fast cars.  Go to live in an expensive hotel for the rest of your life.

Then think of all that money which you are not leaving to the taxman.

Anglo-Spanish Law Societies' Conference


Speaking at the Anglo-Spanish Law Societies' conference at the Law Society's Hall in London.