Generational Inheritance Tax
A tax rule you may not know about is that your children may have to pay tax on money that you have already paid tax on. This is a revenue scheme that allows the taxman to tax your money generation after generation.
If you and your partner have traditional mirror Wills your money could be under threat. The first to die leaves everything to the survivor, before passing the estate to your children. Inheritance Tax is due and must be paid by your children – up to a whopping 40% after allowances. When your children pass, their children will have to pay tax as well, and so on.
This can be prevented by setting up a trust in conjunction with your Will, to ensure the taxman only gets one tax payment on your children’s inheritance. This trust can also protect your children’s inheritance from divorce settlements attack by creditors and bypass the probate process.