Categorized | news

Watch out: not even death will stop the taxman

The old saying goes that you can’t avoid either death or paying taxes, but when it comes to inheritance tax avoidance, the taxman is taking steps there as well.

So here’s a funny little story, one that will have you scratching your head. Her Majesty’s Revenue & Customs has decided, in its infinite wisdom, that the time and energy it’s been spending on going after contractors and freelancers on income tax avoidance is best used elsewhere. Now normally I would be handing out cigars and celebrating, but the new focus of the tax authority is on inheritance tax avoidance. In particular, HMRC wants to nip inheritance tax avoidance in the bud… asking you to pay your tax before you die.

Now on the one hand there is a serious possibility that there are some tax planners that are using some rather well-hidden legal loopholes to engage in some massive tax avoidance, mainly because the number of disclosure rules that IHT is quite few when it comes to practical use. There are apparently plenty of ways to purposefully undervalue your estate, so the idea of paying inheritance tax up front before you actually shuffle off your mortal coil is in theory an excellent way to stamp out yet another avenue of tax avoidance.

Then again, on the other hand this just sounds like an incredible inconvenience – and one that seems more than a bit invasive if you ask me! I mean let’s be honest here; whatever happened to leaving your financial problems to your heirs to take care of? Now you’ve got to take care of your inheritance details well before you’re actually gone? It just seems in incredibly poor taste as well, for what it’s worth. Usually HMRC waits until the body is at least cold before taking its pound of flesh out of it, but now the taxman wants it up front and centre while your heart’s still beating! It’s just bad cricket if you ask me. Not that you’re asking me, but I still feel it’s just awfully uncouth to ask people to pay their death tax before they’re actually bloody dead and buried!

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