Inheritance Tax has been described as a voluntary levy – as Lord Jenkins once said, “it is paid by those who distrust their heirs more than they dislike the Inland Revenue”. Yet HMRC collects more than £4 billion each year in Inheritance Tax.

Does your taxable estate exceed the Nil Rate Band, currently £325,000 for 2011/2012 tax year, anything over that amount is taxed at 40%. Everyone for Inheritance Tax purposes is a high rate taxpayer.

There are numerous methods and planning opportunities to help reduce and possibly even mitigate any Inheritance Tax Liability which may exist. These are:-

• Exempt Gifts Allowance
• Potentially Exempt Transfers (PETs)
• Trusts
• Wills
• Alternative Investment Market (AIM)
• Equity Release
• Pension Planning and Inheritance Tax
• Life Assurance

The questions you should be asking are:-

• Do you know what your total net estate is actually valued at?
• When was the last time you updated your Will?
• Do you currently benefit from an existing trust?
• Have you made or do you intend to make any gifts of capital?
• Do you expect to receive any gifts or inheritances?
• Do you wish to release equity from your home?
• Do you have a personal pension?

Taxation, trusts, wills and the AIM are not regulated by the Financial Services Authority.