Express.co.uk spoke exclusively to Finn Houlihan, Managing Director of ATC Tax about how Britons can “develop good tax-led financial planning”, which can set them up for the future. This is “key to taking care of your wealth for the long term and for future generations,” he said.
Mr Houlihan explained that Britons should be comfortable with the idea of investing.
With inflation at seven percent, and interest rates on savings accounts not even earning half of this, money in banks are losing value and as a result people are getting less for their money.
By considering investments, Britons may be able to beat inflation and make the most out of their buck.
Mr Houlihan advises his clients that invest to do it on a long-term basis – more than 10, 15, 20 years.
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“With this in mind, it would be beneficial for you to start saving as early as possible – and saving as much as you can afford to each month.
“This way you can develop your wealth and maintain it for the long term.
“As part of this process, you should build an emergency fund which will provide a buffer in times of economic uncertainty – around three months’ salary – so you don’t need to sell your investments when your pockets are stretched.”
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If someone is not sure about investing, they are advised to seek independent advice.
In order to ensure this wealth is passed onto children and grandchildren individuals should seek an adviser’s guidance on the allowances and gifts they can use to reduce inheritance tax, Mr Houlihan explained.
He said: “A combination of setting up formal trusts, gifts and using protection as whole of life cover can provide a comprehensive approach to reducing inheritance tax on an estate transferred across to family members.
“However, it is often about finding the right combination of solutions for your specific circumstances.
“With good tax led financial planning you can often make sure the inheritance tax bill is reduced to zero.”
Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who has died.
There is normally no Inheritance Tax to pay if either:
- The value of the estate is below the £325,000 threshold
- They leave everything above the £325,000 threshold to their spouse, civil partner, a charity or a community amateur sports club
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