It's official London now has 46,668 millionaires.Thanks to the exponential increase in property prices over the decade. London is not the only area where many people have been rocketed into the millionaires` league.It`s a country-wide phenomenon.
This has serious implications though. Not least the issue of inheritance tax and capital gains tax.The former being the major thorn in the flesh of most home owners.The Inheritance Tax was designed to re- distribute wealth- basic argument for most taxes,whereby the Treasury creams off the estates of deceased wealthy people.Now that is not the case any more because more and more of us now fall in the `wealthy` category based on the threshold where the tax sets in.Presently,an estate(read property,since that is the single most valuable asset most of us have) worth less than £285k does not incur Inheritance tax,but go any higher than that and the taxman hits you with a whopping 40% charge. And there is the rub of the whole matter. Why should people work all their lives to pay the mortgage,renovate and maintain their properties then forfeit most of the accrued equity on such holdings to the government after their demise. The irony is the superbly wealthy for whom the tax was designed do not always pay.Why? How?
They have experienced professional tax advisers who handle their financial affairs. Chief of this is how to minimise their tax liabilities or even to pay nil tax where possible.Tax avoidance is not illegal.Tax evasion is! So get planning how to keep that profit from the taxman.