This is the first of a series of occasional articles on general financial matters written for Chipperfield News by Colin Chamberlain of Edward Jones Ltd (Tel: 01923 270847)

Who would you rather have receiving your estate – your family or the tax man? Income obtained by the Inland Revenue from Inheritance Tax (IHT) has almost doubled over the last 8 years as more and more people are affected by this tax. However, as Roy Jenkins said of IHT “It is, broadly speaking, a voluntary levy paid by those people who distrust their heirs more than they dislike the Inland Revenue.”
The following is a simple four step process to mitigating IHT on your estate:
1. Married couples and civil partners should make sure that their wills are written to make use of both nil rate bands of �285,000 to save up to �114,000 in IHT. There is no loss of control during your lifetime; the surviving spouse retains access; a Will Trust is simple and inexpensive to organise; it has immediate effect.
2. Prevent your estate getting any larger. Make use of trusts that allow you to retain control of your investment capital with the growth growing in trust outside of your estate to mitigate IHT; you may access capital at any time, but you give up the investment growth to your children or other beneficiaries. Make use of trusts to create an income for yourself and reduce your IHT liability on day one.
3. Give away what you can afford. Make use of exempt gifts – use your annual allowance of �3,000; make as many gifts of �250 as you like; make gifts in consideration of marriage; gifts to charities are IHT free; gifts from income that do not affect your lifestyle are allowed.
4. If all else fails, insure the excess IHT liability using life assurance.

NB: The above is for illustration purposes only. Estate planning requires legal and tax expertise that Edward Jones is not authorised to provide, therefore you should obtain legal and tax planning advice from an authorised person (such as a solicitor or accountant).