The line between tax avoidance and tax planning
The whole economy of the government works on tax funds. Taxes are a tribute system old as civilization, which have become esencially unchanged since the very beginning. The state has expenses that it needs to cover, and for such end it uses the money of the ones it rules that is tributed to it under many forms. Modern day taxes are regulated by the law and usually expressed in percentage on wealth or amount in transactions. Of course, money is still money, and all of us want to keep as much as possible. Thus, some people try to trick the system so they can pay less or even no taxes. This is esentially illegal, and these people are investigated by public offices with the purpose of keeping everything in order.
However, the idea of paying less taxes is very tempting for mostly everyone. Good news is that sometimes you don't need to do something wrong or illegal to pay less. Laws are complicated, so there is more than one way of doing things right. Here is where tax planning comes. The whole idea behind this is that, from all the ways in which you can do things, you can choose the one that implies paying less taxes, still within the frames of the legal system.
In order to plan you taxes properly, you need advice. Solicitors and lawyers know the comes and goes of tax law and can show you the best way of achieving what you want and managing your money, so you don't end up paying unnecesary taxes. Here are a couple of ideas on how you can optimize your finances by running a smart tax scheme. However, again, the best thing that you can do is to hire a law counselor -this is, a lawyer- to show you what is best for your case and what will work better for you and your heirs.
The phantom of inheritance tax
How do you like the idea of your life savings going away after you die, just because you die? Some people work their whole life and pile up their savings in hopes that they can legate to their children or even grandchildren, but still the government can -and will- take up to more than half of that when they pass. The purpose of inheritance taxes is to reduce the passive earning of people who have access to large amounts of wealth due do the death of their predecessors -usually their parents-. However, it is also understandable that you don't want to see your life savings fade from the hands of your children or loved ones. It could be your wish to leave everything that you have made to them, so they can enjoy it as a gift when you no longer need it.
Luckily, there is more than one way of reducing inheritance tax percentage, or even becoming exent. Some recent changes in inheritance tax legislation do not only cut down the percentage and the threshold for these taxes, but also change the scene for new ways of tax planning. Doing some legitimate planning will save you -or, more precisely, your heirs- a lot of money. If you have a lot to loose because you have a lot to begin with, reducing your inheritance tax like the rich can be a good option. There are ways of splitting wealth, such as transferring properties to your children while you are still alive, or changing the traditional order in which such wealth is passed - first to your spouse, and after his or her death, to your children. Splitting the wealth and passing it to the next generation in more than one bunch means that you are less likely to hit the threshold where tax percentages go up to the sky.
Other ways of reducing inheritance taxes include to choose wisely where to put your money. Some ways of saving are liable of lesser tax rates, and there are even exent savings. This is the reason why, in example, many people are now transferring their savings from their bank accounts to pension plannings with a drowdown scheme. A well managed pension plan could mean that you can inherit your money for generations without having to pay a lot of inheritance tax.
Contact a solicitor for professional advice
As you can see, there are many ways to beat inheritance tax, and even more than the ones listed here. Planning your taxes wisely will protect your family estate and economy, but you must do it right. With taxes as high as the ones that we have here in the United Kingdom, in comparison to taxes in other countries, hiring a lawyer who is specialized in tax planning is a great investment that can save you thousands and thousands of pounds in taxes.