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Are we afraid to seek tax advice to protect and safeguard our assets, or insufficiently briefed on the importance of thinking about tax?
The UK tax code is widely cited as the longest in the world; its length infers complexity (and expense) which it is widely acknowledged has contributed to a sense of ‘tax fear’.
In 2010, the Office of Tax Simplification (OTS) was created to provide independent advice and recommendations to government on making the tax system simpler and easier to interact with for tax payers. But the simple truth is a complex set of rules often leads to a fairer set of rules, because it can cater for more scenarios, as with many things in life, it is unrealistic to have a one size fits all. The challenge for government, and in turn, for advisors guiding families is communicating those rules so they are more readily understood.
So what can families do to navigate prevailing tax rules and ensure they are making the right decisions?
Do not be afraid to take advice but be clear about what you want to achieve for your family before you speak to an advisor so that the driving force behind any advice is your family story;
Do not be tempted to ‘self-tax plan’; you could start down the wrong path, which could become costly and stressful to rectify, if not for you, but for your loved ones after your death – ignorance of tax rules is rarely a reasonable excuse accepted by HMRC;
Think about tax planning as a journey; the earlier you start the better; with more time, there are more options and greater flexibility to react to changing family circumstances (and tax rules).
families desperate to leave as much as possible to their children risked inadvertently leaving their family worse off in the long run because of misunderstandings over the rules