Considering the best way to avoid inheritance tax, think of Alistair Cooke. Who or what comes to mind when you hear the name?
Sir Alistair Cook, captain of England at both one-day and test cricket?
Cook sounds no different from Cooke. Perhaps as I don’t follow cricket, and perhaps because this is my fifty-fifth winter, the person who comes to my mind is the host of Letter from America, the longest-running radio programme presented by any one individual, Sir Alistair Cooke.
Perhaps it’s because I held a high fidelity for the radio show from the instant I could appreciate the spoken word on the wireless till the last transmission of the show in my fortieth year. In my childhood home, you could set your watch by the start of the broadcast on a Sunday morning.
There is this injunction of which you might be aware: that all who write, for whatever reason, to whatever purpose or by whichever end, should write only of which they know. There is no rule, observation or tenet of which I am cognisant that I’ve not failed to uphold.
Inheritance Tax & Records
Let’s talk of golf, it might show us a thing or two about the best way to avoid inheritance tax.
Yet, no one knows nothing of anything. Certainly, no one who listened to the late Sir Alistair could be unaware of golf being a sport in which there are no judges, there are no umpires, there are no referees. He held it as a mark of soundness of character that each player kept their own score.
Where’s the Proof?
Several readers contacted me about an item last month, regarding Russ Mantle.
Mr Mantle has cycled a million miles. Russ is the first person on these islands to have been so acclaimed.
Here’s the thing. My readers surmised, sensibly, that at the approach of the landmark, the vicarious celebrants and throwers of parties wouldn’t have wanted egg on their face. They’d have ummed and ahed about the veracity of the milestone. They’d have sought proof of these miles. (I’m told the popular, though illiterate phrase is ‘to do one’s due diligence’.)
Although he didn’t set out to break any records, Mr Mantle kept a record of each of his rides. He was, in his youth, a competitive cyclist, breasting the tape first several times.
He commuted to work by bicycle. He went everywhere by bike.
He kept records, and they are easy to verify. He said: ‘I had a car for 37 years, it finished up with only 18,500 miles on the clock, and I was doing more than 18,500 in one year on my bicycle.’
Former soldier and retired civil servant, Mr Mantle has woven his no small achievement from pieces of his records.
I’m a cyclist of greater enthusiasm than talent. I pedal at the speed of a sloth, nonetheless each of my meagre miles is logged. Any claims of distances covered can be checked with little effort.
Record Keeping is Key
You might have heard of the seven-year-rule of inheritance tax. Broadly speaking, any gifts made to parties other than charities on the one hand or one’s spouse or civil partner on the other are liable to inheritance tax at the prevailing rate if you die within seven years of making the gift. Often, it’s 14 years from the date of the gift, but we’ll return to that another time.
Fourteen years or seven years, the point is to keep records of all gifts made, and to whom.
Accurate, complete and faithful records minimize the tax payable on one’s estate and make estate administration a doddle. A simple notebook with such notations as: ‘£1,500 to my nephew Bob Smith on First February 2019 – for purchase of Raleigh bicycle’ or ‘Gift of £5,600 Rolex to my daughter Sally on her twenty first birthday’ will do. Some keep records in more elaborate ways and by complicated means, they are fond of spreadsheets and such.
For the best way to avoid inheritance tax, contact me for a free, no-obligation appointment.