I’ve clients from John O’ Groats to Johannesburg. I’ve clients in ports and stops in between. Janis is one of my more recent patrons. She lives in Wasdale, Cumbria. Janis plans to enter a local competition next year. She’ll be first female contestant. More of which later. Her entry though put me in mind of charity and inheritance tax.
Like you, I was brought up not to call politicians liars. First, it’s uncouth to accuse folk of sophistry. Secondly, it’s too easy. Finally, office holders, especially politicians, can be hostages to fortune – stuff happens.
Nonetheless events overtake statements and statesmen.
Like you, I was brought up to see the good in everyone, even politicians – though we might know some of them to be cynical, avaricious leeches whose only human trait is venality. My mother would have been proud.
Some six summers back, some politician, no mugwump, stood at the dispatch box and told porkies about inheritance tax. He uttered whoppers about charities. He bare-arsed lied about charitable gifts and taxes on gifts.
This fellow – and his confederates – put it about that if you left at least a tenth of your estate to charity, the inheritance tax due on the estate would be reduced to 36% – from 40%. This exercise defines charities in so broad a manner as to stretch credulity.
Lies, Damned Lies and Barefaced Lies
If this were less serious, one might have called it terminological inexactitude – but that would be dishonesty so grave as to induce moral bankruptcy.
No smoke and mirrors.
No sleight of hand.
This is a lie.
When we rumbled them, we were meant to focus on the latter-day Jo Moore. We were meant to give them room in our radio and on our newspapers. We were meant to grant them space to spread further half-truths.
The starting point of inheritance tax planning has never been to deny the exchequer its dues. The point of inheritance planning is to give all you have to your family.
Charity begins at home.
The 10% charity rule does not make your family better off. Not by one penny. Not by one farthing. Not by one cowrie shell. The new rules lead you to believe, if your original intention was to leave all your estate to your family, but you changed your mind and left at least a tenth of your estate to charity, your family would pay less inheritance tax.
I have friends, acquaintances and colleagues who teach mathematics. They supervise PhD candidates, instruct A-level students, and educate boys and girls doing the GCSE. I’m assured thus: at no point would your family be better off by changing your will to leave a tithe to charity.
This rule makes no difference to charities. Under the previous dispensation, charities were no worse off than they are today. Gifts to charities were previously exempt from inheritance tax.
If you were going leave money to charity, please, go ahead.
But they imply your family would be better off if you left a gift to charity in your will – it is a big fat lie.
Back to Janis, my Wasdale client. By now you might have guessed which tournament she planned to enter. Here’s a clue: she muses the organisers are missing a considerable, nay, bottomless pool of natural talent. The competition rules prohibit entries from politicians.
Janis plans to be the first woman to enter the World’s Greatest Liar Contest. So, let’s wish her good luck!
Meanwhile, contact me to talk about leaving the most of your wealth to your family.
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