Year End Tax Review 2008 Contents New Year's resolutions Investment limits Borrowings and tax Family tax planning Mr and Mrs Give generously and save tax Jam today, or jam tomorrow? Tax payback - tax credits Bringing it back home Children's pensions? A matter of trust Children's savings? All change for gains Second homes Portfolio gains Capital ideas Tax-free perks Employee pensions and NIC Pension policies Employee cars and fuel Business tax Pay rise for the other half? Company or trade Two jobs = too much NIC Should VAT be flat? VAT and cash Inheritance tax One careful owner

Inheritance tax Inheritance tax is often thought of as a tax for the rich, but it is really a tax for the unprepared - the rich have usually made their arrangements and pay very little. Although IHT is not so closely related to the tax year, an annual review of tax matters can usefully include checking the exposure to IHT and whether anything can be done to mitigate it. In particular, it is useful to have a clear and up-to-date Will, which has been drafted with tax in mind. This is particularly important if you have total assets, including a house and any insurance policies which would be paid to your estate on death, in excess of £300,000 - the current starting point for IHT. There are a number of standard, unobjectionable measures which people can take to save very significant amounts of IHT. These include: reviewing the payees of the proceeds of insurance and pension policies - if the insured person's executors are entitled to the money on a death, there will be unnecessary IHT; giving surplus assets away as early as possible - they will fall out of IHT altogether if you survive 7 years after the gift; l making regular gifts during lifetime rather than saving up for a big legacy on death - the regular gifts are generally not chargeable at all, while the big legacy is likely to cost 40% in tax. In October 2007, the new Chancellor announced an important change to the way married couples and registered civil partners are taxed if they leave property to each other when the first one dies. If you have ever done any tax planning in this area, it's worth reviewing it. If you never have, the Chancellor may have saved you the trouble - but it's still worth looking at! Action Point! Have you considered how much IHT you might pay?