Friday, September 01, 2006

Wills and Inheritance Tax: The death of the Nuclear family

Wills and Inheritance Tax: The death of the Nuclear family

The death of the Nuclear family

This is a scenario that is going to become more and more common as the "nuclear" family of 2 parents and 2.2 children continues to decline. There are more and more families where there are children from different relationships. This can cause all sorts of financial problems if the families do not sort out their Wills.
Here is an example of good planning to ensure that children are looked after once you are gone.
the situation is:-
Married couple of 26 years. They have a grown up daughter and the father has an illegitimate son aged 11. The father is in a very well paid job and pays £500 a month maintenance on an informal basis (i.e. not through the courts or the dreaded CSA). In his Will we have set up a trust fund that will buy an annuity which will continue to pay the maintanance on a monthly basis until the child is 18.
This ensures that the child is taken care of. It keeps the courts out of the process therefore mitigating a lot of heartache and undue expense both for the child's mother and the fathers wife and family.
If you have a similar problem to this we can offer free advice just call 0161 480 4441

Monday, August 28, 2006

China thinking of introducing Inheritance tax

China is thinking of introducing Inheritance Tax as the wealth gap increases between rich and poor. This seems strange at a time when we are looking at either reducing it or scrapping it all together.
Read the full article from the Shanghai Daily

Sunday, August 27, 2006

Make sure you have the right Wills

Most people seem to have a mental block when it comes to writing a Will. As the saying goes there are only two things in life that are certain and they are Death and Taxes. Now unfortunately science has not come up with a patent cure all that will help us evade the inevitable, but there is something you can do about the taxes.
Burying your head in the sand and ignoring the inevitable is not an option therefore everyone should have a Will.
There are three basic reasons people do not write a Will
1) Apathy - I know I should write a Will but I haven't got round to it
2) The Fear factor - If I write a Will I'm going to die
3) Bloody mindedness - Its not my problem I will be dead.

For people who fall into point 1 the answer is to make the process easier and simpler.

For this that fall into point 2 the answer or more importantly the question they should be asked is if you think your are going to die if you write a Will why do you have car insurance? - Do you think you are going to die if you have a crash? Obviously not but they have car insurance because the government makes them have it.

For those that fall into point 3 unfortunately there is no answer for these people and all they are going to leave is a financial mess for their loved ones.

Over 60% of the population of England and Wales haven't even written a basic Will!!
Those that have written a Will think it is a once in a lifetime process. Not true. They will review their mortgage, their investments and other financial products but their Will is generally out of date and bears no resemblance to their situation at present.

The trap I see people falling into all the time is "I leave everything to my wife/husband/partner and then onto the children" This is where most people have written "Mirror Wills"
The problem with this is that as their estate has increased in value including their house value then they have failed to utilise their tax allowance for Inheritance Tax purposes. What they should be looking at is to change their Will to a Nil Rate Band discretaionary trust Will. This can save a family up to £114,000 in IHT. For a full explanation of how this works click here.

What happens if a Will is challenged?

Most people don't realise that anyone can challenge a Will in court if they feel that there has been any hint of collusion, or un due influence on the Testator (the person writing their Will).
To highlight what can happen take a look a this article from the Guardian. It also highlights what happens when someone dies intestate (i.e. dying without a valid Will).
In this case even though the deceased left over £10 million the second wife was only due the first £125,000 of the estate as the deceased will was contested and found to be invalid.
here is the link: High court declares will invalid

Tories won't be cutting Inheritance Tax

The Conservatives are looking at ways of easing the burden of inheritance tax, including the possibility of exempting a deceased person's main home from the 40 per cent levy, George Osborne, the shadow chancellor, said yesterday.
But he ruled out any early move to abolish inheritance tax, as proposed by Stephen Byers, one of Tony Blair's allies, saying that the Tories had to put economic stability before tax cuts.
An increase in property prices has resulted in a sharp increase in the number of estates in the UK paying inheritance tax - up by 72 per cent in the five years up to 2004, according to a recent study.
More than 30,451 estates, most worth less than £500,000, were liable for the tax. A further 22 per cent rise to 37,000 is expected by next year, according to Halifax, which carried out the study.
It is calling for the inheritance tax threshold to be raised to £430,000 in line with house price inflation.
The threshold for inheritance tax has risen by 85 per cent since 1996 - but the housing market has grown by 179 per cent. It is currently set at £285,000, though Gordon Brown, the Chancellor, has promised to increase it to £325,000 by 2010.
Mr Byers, the former transport minister, writing in The Sunday Telegraph, said that inheritance tax, which is expected to raise £3.6 billion this year, was a "tax on death" and called for it to be abolished. But he was immediately slapped down by supporters of the Chancellor, who dismissed calls to abolish the tax as "nonsense".
Mr Osborne, interviewed on BBC Radio 4's Today programme, was asked whether an incoming Conservative government would abolish inheritance tax. He said Mr Byers was right to argue that inheritance tax had become increasingly unfair. But he added that it would be an expensive tax to abolish and, as a possible future chancellor, it would be "irresponsible" for him to commit the Tories to scrapping it.
Mr Osborne said the Tories were looking at options for reforming inheritance tax. These included raising the threshold, cutting the rate, or exempting a person's primary home

Tories to give Tax cuts?

George Osborne said today that the The Tories will look at cutting stamp duty on shares if they get elected in the next election. What does that me to you and me? Not a lot directly but indirectly it could have a massive effect on our pensions. Most pension companies trade in stocks and shares and the 0.5% duty applied to these share trades impact on the value of your pension fund. They have not however committed to abolishing Inheritance Tax. Why not?. Osborne has agreed with with Stephen Byers that inheritance Tax is unfair but cannot commit to scapping it. Why not? Perhaps its because they have looked at the figures and come to the conclusion that it brings in too much money to just scrap it. If they want to reduce tax on middle England then this is where they should start. Read the full story from the telegraph here

Monday, August 21, 2006

Theres been a dramitic increase in Inheritance Tax cases

The number of estates in the UK paying inheritance tax rose by 72% in the five years up to 2004, according to a study.
According to the Halifax an increase in property prices left more than 30,000 estates - most worth less than £500,000 - liable for the tax.
This is only going to get worse as they are prediciting a 22% increase 2007.

For most estates below £500,000 there is a simple solution and that is to write what are known as in the industry as Nil Rate Band Discretionary Wills or IHT saving Wills.

For a full explanation of how these work click here

Is Inheritance Tax fair?

Inheritance tax (IHT) affects estates which are valued at more than £285,000.
There has been opposition to the tax from all sides of the political spectrum but the government has so far avoided making any changes.
Yesterday former cabinet minister Stephen Byers called for a scrapping of inheritance tax calling it a Tax on thrift, hard work and enterprise. I dont think the tories would ever scrap IHT all together but they might increase the threshold to a more realistic level which would take a large percentage of the families in the trap at the moment.
The Treasury insists that Inheritance tax is "fair" and only effects 6% of Estates.
I don't know where the treasury gets its' figures from but the majority of clients we see are in the "Inheritance tax trap", due to either hard work, good financial management or simply due their houses rapidly rising over the last few years. All these families want to do is pass on their estates to their children. There is no hint of tax avoidance for most of the clients we see who sometimes don't even realise they have a problem.
For married couples and people in a civil partnership there is one very simple step they can take. Get their Wills written!!.
Simply by using both their personal Nil Rate band allowances for IHT they can get their estate up to £580,000 before any IHT is due. Dont forget there is no IHT between spouses due to the inter spousal exemption.
For more information go to Estate Planning Solutions or visit our on line channel

Extremely Useful tax tables

I have come across this Independent Financial Advisors site that has an extremely helpful set of Tax tables. They cover most aspects of Tax allownaces from Income Tax to Inheritance Tax. they are up to date and laid out in a very easy to understand way.
click here for the Tax tables

New Lens site

Well I have really embraced cyberspace and have started a Lens site. Dont know what one is? well neither did I untill a few days ago. I was looking at someones profile on ecadmey and it had a link to a Lens site so I clicked through and there it was. so I clicked the create the make your own lens site. It was really easy to set up and I will be using it in conjunction with our web site and this Blog site.
Click here for our lens site

New Tax Guides

Have you got a taxing problem? Take a look at our new Tax guides at our Tax guide bookshop.
click here for all the information

Monday, March 06, 2006

The NHS Homes scandal

Having watched last nights Panorama program there will be a lot of angry people out there. The program highlighted the gradual change in how the government are shifting responsibility away from the state to the local authorities on how and who should be funding peoples long term care. Every year there are over 70,000 homes sold to fund long term care. This is a shocking situation when people have worked all their lives to pay off their mortgage and all they want to do is leave it to their children. Mark my words this situation is only going to get worse. There is a £30 billion black hole in long term care funding and the governmentt want us to pay for it.
The program highlighted the fact that most peoplee should have been funded anyway and Local authorities are changing the care from medical to residential care which is means tested.

If you plan your estate correctly then you can stop this happening. People need to do this years in advance of someone going into care. This can simply be done by changing the way you own your property from Joint Tenants to Tenants in Common.There is a full explanation on our web site at
If anyone wants any more information please give me a call on 0161 480 4441

Sunday, March 05, 2006

Writing your Will on line

Having looked at the many and varied on line Will sites there is a constant theme running throgh them. They are all trying to portray a "easy" or "simple" approach or 5 minute this and ten minute that. This tends to lull the user into the fact that Wills are a simple thing to do. Well yes they are if you have the right information and its going to achieve what you want it to.
Having seen many home made and on line made Wills from all sorts of clients this does concern me. Most of them allow you to print out the Will there and then. No intervention from a qualified Will drafter to ensure the clients are doing the right thing for their particular circumstances.
There is one very good site that allows you to complete all the instructions on line and then it is checked for you and then they print and bound the documents and send via the post.

Take a look at

Thursday, March 02, 2006

What to look for in a Will writer

Firstly lets clear a few things up. Anyone can write a Will there is no legal requirement for a solicitor to do it. You can write your own but beware - there are many pitfalls in home made wills and they can be challenged or fail all too easily. This is your estate we are talking about so don't take it lightly.

A good will writer will be a member of The Society of Will writers or The Institute of Will Writers if they are not why not? These are the governing bodies of the industry. Also they should have Professional Indemnity Insurance preferably £2,000,000 per case. If notdon'tt deal with them as if anything goes wrong your family need to be recompensed for any loss.

Do they know what they are doing. Will writing is a bit like the Mortgage market was 10 years ago. Anyone can set up as a will writer and operate out of their back bedroom. They may be storing your wills at home, they may have noinsurancee so becarefull.

Always ask for proof ofmembershipp and ask forprooff of Insurance if they cant give you thesedon'tt deal with them.

Also are the selling on price. We have all seen the adverts "Get your Will for £19.99" nonsense. If you think about it how can anybody run a proper business and provide a quality service for £19.99.
For a properly drafted Will you should be looking at approximately £80-£100 for a Single will and £120-£150 for a set of Mirror Wills.
Dont go for the cheapest. When a problem does arise unfortuneatly you wont be there to sort it out and your family could end up loosing out financially.

Enduring Powers of Attorney

What are they?
Who needs one?
How do I get one?
What are the pitfalls?
What are they?
An Enduring Power of attorney or EPA is a Legal Document that you can write at any time in your life whereby you can determine who can intevene in your finacial affiars should you become incapable of managing them your self. As the name suggests the power of attorney endures through either physical or mental incapacity. All EPAs must have the same wording (although the layuot maybe different) and will always contain
1) Part A which are the guidance notes on how to use the document
2) Part B which lays out the Donors details (the person giving the power) and the attorenys details
3) Part B (cont) is where the donor signs the document in front of an independant witness
4) Part C there is a part C for each of the attorneys to sign. You can have a maximum of 4 attornies per EPA and the either act joiuntly or jointly and severally
Who Needs one?
Anyone who is concerned about manageing their affiars should they become incapabale especilly if they have joint assets with their spouse or partner.
How do I get one?
You can get an EPA drafted by a qualified wioll writer or Solicitor. Estate planning solutuons can complete one for you either face to face or over the telephone. or you can one done on the internet at
What are the pitfalls?
Most people dont realise the power of these documents. You should always include restrictions in an EPA so they are not abused. They should always include a clause that states that the document will not be valid unless you have lost the capacity and it has been registered at the Court of Protection

New Tax Guides

Visit our new Tax Guide Book Shop
Estate Planning solutions have just lauched a new tax guide book shop. here you will find lots and lots of extremely usefull tax guides from Iheritance Tax to Overseas property tax guides. all books can be either downloaded or recieved in hard format. Please comment on what you think the book shop looks like

Don't Let the Tax Man steal your childrens Inheritance

If you have been reading the national press lately (especilaly the Daily Mail and The Express) there is a huge outcry about people having to pay Inheritance Tax on their estate if they have assets above £275,000 including the family home at a whopping 40%.
It is estimeted that 34% of all households in England and wales are in the Inheritance Tax Trap purely due to the the value of the family home. This Labour government has not increased the threshold to keep pace with house inflation and took over £3 Billion in Inheritance Tax last year. This is the equivalent of 1 penny on income tax.

For more indepth information go to

Most people can get their estates up to £550,000 before paying Inheritance Tax purely by writing their wills the right way.
Rember " A will can achieve a lot more than you think"
There is a very important program on BBC 1 @ 10:00pm on Sunday. This is a panorama program focusing on older people having their homes taken away from them to fund their long term care.
Will be interesting how they portray this.

Wills and Estate Planning
So you have worked hard all your Life, paid the mortgage off and want to leave the kids an Inheritance. You better be careful. Have you thought what would happen if you went into long term care. The government have identified that there is over £450 Billion pounds worth of equity in homes in the UK owned by people over 65. Why do this survey.Becausee the government want to get their hands on your assets if you go into care. More and more people are living longer and longer. More and more people are going into care so the government have to fund this high cost form somewhere.Your house that's where.
But if you have planned properly you can save some or all of it. Simply by changing the way you own your property you can shelter most of it via your wills. How can this be. Well let me explain. By setting up what is known as a property trust in your Wills and splitting the ownership 50/50 (if you are married or with a partner) on first death the 50% owned by the decaesed is passed into a trust with the remaining spouse a beneficiary and trustee of the trust. This is set up in such a way that the remaining spouse has a life time interest and can not be removed from the property at any time. They can also move i.e. buy and sell another house but the trust always has first call on the property. This means that if the remianig spouse were to go into care then at leasts 50% of the property is protected if not all.
Please note that this does not work for Inheritance tax purposes. I will cover that in a latter article.
If any one would like to discuss this or would like more information please visit this link or call me at the office on 0161 480 4441

I dont need a Will

Do you know what happens if you die without a Will? No well follow this link and we will show you and I think you will be surprised. Your assets may not go where you think they would. The number of times I have heard clients say "Well I dont need a Will my wifes going to get everything" Oh so wrong. If you have an estate of over £125,000 including your home you need a Will.
In the next article we will show you how to structure your estate so you can protect your property from the goverment to fund long term care.

Follow this link


Welcome to our Blog. The purpose of this site is to give people all the free information they require to plan their estates properly to ensure that Gordon Brown or any of his successors cant get their hands on any of your hard earned cash when you die.
I have been in the Will writing industry for some years and am appalled at the lack of planning people do with regards to Wills and Estate Planning.
Do you want the tax man to get 40% of your estate if you die. I think not.
With proper planning you get your Estate up to £550,000 before you pay any Inheritance tax.

Post your questions and we will point you in the right Direction.