Inheritance Tax Manifesto Pledge Con

Inheritance Tax Manifesto Pledge Con.

This weekend Chancellor of the Exchequer George Osborne suggested that the Conservatives would remove family homes worth up to £1 million from inheritance tax.

Labour has suggested they will not increase the inheritance tax threshold.

UKIP has suggested that they will ban inheritance tax altogether.

We suggest all of these proposals of the ultimate con.

As a vote winner any move to reduce the tax burden on death is clearly a welcome one. However, as financial planners and tax advisers we suggest this is a 'smokescreen'.

We do not care whether your politics are red, blue, yellow, purple or green. By making manifesto promises regarding inheritance tax, each party then counters arguments for the other by one suggesting they are looking after the rich and another suggesting they are increasing the threshold because this ‘supports the basic human instinct to provide for your children’, you may be forgiven for being confused by too is offering the most sensible message.

Whether a party removes inheritance tax altogether or increases the allowance to £1 million removes the main residence from any inheritance tax calculation, or keeps the threshold low and taxis you, it is totally immaterial. The fact remains that by encouraging you to do nothing with your main residence in the hope that you can leave it to your children or loved ones as a gift on death, is a total con.

If you do nothing with your property and retain ownership it can be means tested for care. By encouraging people to retain their properties should you need later life care either in a care home or have care at your own home, these benefits are means tested. This means that your property will be included in the means test and potentially your children will not inherit the property anyway.

Our view is that you should ignore politicians and take professional financial advice with regard to how you own not just your savings and investments but also your main residential home irrespective of political spin. If you want your children to inherit your property all your money you should take action when you are fit and healthy. Do not leave it until it is too late.