JEFF PRESTRIDGE: Joy of giving (and leaving as little as you can to taxman!)

Inheritance tax has existed with us for more than 300 years in various shapes and forms. It divides opinion. It is charged at a steep 40 per cent on the value of estates over £325,000, although there is a further exemption for those who pass their homes on to descendants.

Some politicians, mostly conservatives, hate it and think it should be abolished.

Others – including those on the left of the political spectrum – believe it should be reformed with the tax paid by those who receive the proceeds rather than from the deceased’s estate.

The taxpayer is coming: Although thought to be paid only by the wealthy, inheritance tax has increasingly become a weapon to generate income

Although thought to be paid only by the wealthy, inheritance tax has increasingly become a weapon to generate income. The zero-rate band has been stuck in deep mud at £325,000 since 2009 and looks set to stay there until 2028 – perhaps later – as this government and the next try to restore the country’s finances.

As a result of this classic case of tax burden (a specialty of the Conservatives), more estates are being sucked into inheritance tax territory. The most recent statistics confirm that the amount of tax on this death benefit increased by 14 per cent in the six months to October this year to £4.1 billion. The Office for Budget Responsibility, an auditor of government figures, estimates that income from estate tax will rise to £7.8 billion in the tax year ending 5 April 2028, compared to £6.1 billion in the tax year ending 5 April 2028. year.

Of course, there are plenty of ways in which estate taxes can be kept low, including by making gifts to family and friends, custodianing life insurance policies, and having an up-to-date will. Hiring a good financial planner will also pay for itself in tax savings.

“The key is to plan the tax as soon as possible,” says Jessica Ayres, a chartered financial advisor at Timothy James & Partners, whom I met for coffee last week.

As Benjamin Franklin, one of the founding fathers of the United States of America, said, “In this world nothing is certain except death and taxes.” So make sure you leave as little of your hard-earned assets as possible to the tax authorities.’

Absolute. Well said Jessica.

Good to see Nationwide doing business

How good it is to see Nationwide Building Society trying to strengthen its place in Wokingham’s high street by promoting business.

Although Wokingham, my hometown in Berkshire, is in expansion mode, this hasn’t stopped Santander from closing its branch in recent months. It also hasn’t stopped NatWest from announcing that it plans to pull the plug on the branch in February.

Nationwide responded by sticking a message on the window that read, “If your local bank closes, why not join a building society?” Why not indeed.

Death charges are barkingly crazy

Aside from estate taxes, the government doesn’t benefit much when we eventually shake off this mortal spiral and our funerals have to be arranged by loved ones.

As a result, the funeral director’s costs (everything from the coffin to the hearse) and the bill for the cremation (or burial) are all exempt from VAT, as are death certificates and the cost of the church service.

Barking Crazy: Animal Lovers Must Pay 20 Percent Vat If They Want To Have Their Recently Deceased Dog Or Cat Buried Or Cremated

Barking crazy: animal lovers must pay 20 percent VAT if they want to have their recently deceased dog or cat buried or cremated

Still, there are some baffling anomalies. For example, animal lovers must pay 20 percent VAT if they want to have their recently deceased dog or cat buried or cremated. Why? Barkingly crazy, I say – many people I know mourned their deceased pet more than their former partner. Similarly, it seems rather cruel that someone who pays for the publication of an obituary in a local or national newspaper should pay VAT on the bill.

The tax is also levied if a loved one wishes to purchase a headstone or plaque which they can then visit and pay their respects (my father’s memorial plaque in the gardens of Sutton Coldfield Crematorium on the outskirts of Birmingham is a must-go when I visiting my mother).

Why these random causes of death? It all seems so cruel and unfeeling. I know times are tough and the government is looking for every penny it can collect in taxes, but time, I think, for a rethink.

Always read the conditions

It is a message I have been preaching for many years.

Unfortunately I have a confession to make. I have not adhered to it in my domestic life.

For the past six weeks I’ve been happily washing my clothes with Fairy Platinum All In One Original dishwasher tablets – without even a second thought that something might be wrong when my trousers and socks came out of the wash almost starched. Not even the odd itch here or there alerted me to the error of my ways!

Only when my friendly cleaner asked why I had two packs of dishwasher tablets in my cupboard, but no washing powder, did the penny drop. I have now bought some washing tablets. As I said at the beginning, always read the fine print – and, crucially, the label too.

Financial education is a must

Protagonist: Yasmeen Abbas

Protagonist: Yasmeen Abbas

I am a strong believer in personal financial education. The more financially aware kids are when they leave school at age 16 or 18, the more prepared they will be to face the myriad loan sharks, scammers, and spinners of cryptocurrency financial wonders that will be headed their way.

That’s why I recently spent a Sunday reviewing entries for Interactive Investor’s Personal Finance Teacher of the Year Awards.

What struck me as I read through the excellent shortlisted entries was the imagination, creativity and passion of all the teachers. So, congratulations to the winners of the Primary and Secondary Education Teacher Awards.

Yasmeen Abbas, St Silas Church of England Primary Academy, Blackburn – you are a star at teaching personal finance. The same goes for Emma Baker, who teaches at Caldicot School in Ysgol-Cil-y-Coed in Monmouthshire. Winners in so many ways.

The hidden ‘treasures’ in my office

I’m clearing out my office for a move across the street (no, I’m not leaving quite yet).

Among the treasures I discovered were a Complete Guide To Personal Finance, written by my good self (2002) and Jeff’s Lunchbox (an amusing insight, if I do say so myself, into the turbulent relationship between financial journalists and PR consultants).

Also buried under the rubble of the office was a beautiful hardcover edition of Toby Walne’s 101 Extraordinary Investments (covering everything from Action Man to World War II paraphernalia) and Mark Dampier’s guide to effective investing – in which he boldly stated (in 2015) that Neil Woodford the ‘best fund manager currently working in the UK’.

Although Woodford was with Invesco at the time, Mark’s enthusiasm for Woodford helps explain why Hargreaves Lansdown, where he worked, recommended investment fund Woodford Equity Income until the day it was suspended in 2019 – and then dismantled.

For the record, all four books are available on Amazon for £0.63, £6.53, £3.53 and £0.95 respectively. Only my lunch box and my colleague Walne’s book (once popular in South Korea) have retained a semblance of value. They are not stocking fillers.

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