Press Release: Look ahead to avoid leaving tax waste behind

A tax expert is urging people to plan ahead after an independent survey revealed that UK tax payers will waste £1.3 billion this year due to poor inheritance tax planning.

The review, carried out by professional advice service unbiased.co.uk, showed that inheritance tax is Britain’s second biggest tax waste area –making up for ten per cent of the overall tax wasted in the UK – beaten only by tax credits.

The research also discovered that nine out of ten people have done nothing in the last 12 months to reduce the amount of tax they pay.

But as John Rouse, partner in the wills trust and tax department at Midland law firm Wright Hassall, feels this is an area where simple steps can lead to big savings.

He said: “As this report illustrates, people tend not to plan for inheritance tax, wasting large amounts of money as a result.

“This tax wastage is only likely to increase as the inheritance tax threshold will remain frozen at £325,000 until April 2014, rather than rising in line with inflation.
 
“Huge sums are being paid unnecessarily in taxes which could be avoided by taking tax planning advice, leaving more available for a person’s beneficiaries on his or her death.
 
“One of the biggest causes of inheritance tax wastage is due to individuals failing to write insurance policies into trust, a process that is relatively straightforward.
 
“By writing a life insurance into trust means that you leave any life insurance proceeds directly to your family or beneficiaries as opposed to passing to them via your will resulting in the government taking 40 per cent via tax.

“There are also other straightforward steps that can reduce your potential tax liability, such as using your annual gift exemptions, making an appropriate will and setting up your assets or business in a tax efficient way.

“However people are not seeking the professional advice that will allow them to make such savings and as long as this continues so will the huge levels of wastage.”

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