“Let me tell you how it will be; there’s one for you, nineteen for me.”
Yes, those words were penned by George Harrison in the hit Beatles song “Taxman;” yet the reality was very different when it came to Mr Harrison’s estate following his death.
Despite leaving a £99 million fortune, Harrison’s estate was charged ZERO Inheritance Tax. Today, the IHT threshold is set at £325,000- so how on Earth did “The Quiet Beatle” end up paying nothing at all?
The answer is more straightforward than you may think; George Harrison made use of a Trust.
By placing his assets into trust before his death, Harrison allowed his family to avoid paying approximately £40 million in Inheritance Tax.
Trusts keep your assets protected by placing them in the hands of trustees; people you nominate to hold your assets for the benefit of your beneficiaries. When the time comes, the Trustees will pass on these assets in the manner you specify within the Trust document. Because the assets are then no longer in your name, they are protected from taxes, losses to local authorities and other third parties, providing the highest level of protection possible for your assets.
Anybody can create a Trust, regardless of the size of your estate, and it’s more affordable than you think. Placing your assets into trust has many benefits; you protect your assets from the effects of relationship breakdown, safeguard them from losses to third parties and provide your loved ones with the best chance of inheriting as much as possible after you’re gone.
So now you know how to prevent being charged excessive tax on your estate- and it isn’t by joining the Beatles.
Speak to Accord Legal Services today for more information regarding Trusts, on 01744 807048.