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The morbid tax regime that leaves would-be benefactors out-guessing their own demise by at least seven years leaves more than a few caught out by a premature reaping. Grim is the only word for it.
If you’re more than a little confused by the rules around willing, gifting and inheriting, you could take some heart from the fact that you’re not alone. You’re not even in a minority. Admission to the club for the dazed and confused over what happens to your earthly assets, when your mortal coil has finally done it’s shuffling, is open to anyone. Some recent research shows that most people are card-carrying members. You can hear the Chancellor rubbing his hands in glee - a sound not unlike the Reaper sharpening his scythe.
Short of keeping news of your death a bit quiet for the statutory seven years, Springfords have a few ways to legitimately plan your way around those immortal regulations.
Whether breathing your last, or still in the rudest of health, most of us have a passing notion of inheritance tax, and the spectre of death duties turning our wake into a wailing wall of regret. Most of us at least think about getting our affairs in order before St Peter sends out his final reminder. Sadly, more than a few of us take it no further than that and get financially caught out by that most certain of certainties.
Around half of business owners have not even given any consideration to their company shares when it comes to writing up their will nor are they aware of the benefits of share insurance. The insurance giant Legal & General reckons around 51% of small company owners have left no instructions in their will, nor made any special arrangements regarding shares. Only about a quarter of shareholders say they’d be willing to pick up the holding of a demised shareholder, and even half of them would have to dip into personal savings to fund the purchase. So without forward inheritance tax planning and share insurance, it doesn't sound like much fun for family, friends and colleagues, who might have legitimately expected a bit more largess in the case of your untimely demise.
As long as you haven’t gone ahead and died already, there’s plenty of advice available from Springfords - such as don’t go ahead and die without planning your succession and inheritance. Even if you have ignored our top line of advice, there’s still plenty we can do to help sort out your affairs, and mitigate the liabilities for the stylishly black clad posse you’ve left behind.
Chancellor Philip Hammond couldn’t exactly be accused of putting education on inheritance tax matters at the top of his to do list. After all, why should he? The errant benevolent among us are gifting the government millions every year, as unstructured gifts get divided up between the intended recipients and the Treasury.
Meanwhile, research by equity release company Key Retirement, shows that half of parents and grandparents do not understand the tax rules on gifting sums to their offspring. Almost three-quarters of mums, dads, grandads and grannies say the rules are just too complicated.
So if you don’t want every financial gift you make to your offspring, or every corporate inheritance you bequeath, to carry a tag that says “to Philip, with all my love”, you could do a lot worse than start planning now - even if you aren’t planning on anything like a demise anytime soon.