One billion pounds is an awful lot of money. Imagine paying that in tax if you didn't need to. It hardly bears thinking about, and yet that could happen this year if people continue to fail to put life insurance policies in trust.
Typically there are no additional costs involved when putting a policy in trust, yet consumer awareness of the benefits seems low. Reducing an IHT bill and avoiding probate are surely options worth exercising, yet too many people are failing to do so.Trusts do not need to be complicated, but many clients are simply unaware of what they can offer, which is further evidence of the need for financial advice.
Changing tack slightly, one thousand boats is an awful lot of sail, and what a pretty sight it makes. If the subject of overpaid tax has been a little taxing of late, I can suggest nothing better than a dose of good sea air to revive the senses. What better place to breathe this in than the lovely town of Cowes on the Isle of Wight, where in early August 1,000 yachts descend to the marina to celebrate our maritime history in Skandia Cowes Week.
In that week, advisers may well have found that their nautically-inclined clients were a little harder to get hold of as they enjoyed the competitive spirit of the seas, not to mention the post-race celebrations. With a splash of sunshine and a wash of waves, spinnakers filled and corks popped and financial woes faded with the sunset.
With clients suitably refreshed by the medicinal sea air and ready to face the autumn, there is a strong opportunity to take another look at how their finances are arranged. Perhaps policies were taken out some years ago and they have been almost forgotten, but there is no better time than now to review them. Wasting away hours on a boat is entirely pleasurable, but needlessly wasting money on IHT is certainly not.
And for those that missed the Skandia Cowes Week party this year, put the 2nd to the 9th of August 2008 in your diary.
Colin Jelley is head of tax and financial planning at Skandia.
The views expressed in this blog are the individual's own and not necessarily those of the company he represents.
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