How to Write a Tax Efficient Will

By Deborah Bowers

Anyone can wirte a Will. But not everyone can write a tax efficient Will. 

In this book you will learn how to write a valid Will, if you live in the United Kingdom. How to save BIG on Lasting Powers of Attorney and how to apply the inheritance tax provisions to save 40% more of your estate for your loved ones based on your personal circumstances, if you are:

Single

- single, with no children and no home.

- single with no children but own a home.

- single with children and a home.

Married 

- married with no children

- married with children

- married with children and a home

- married with a merged family:

- Married with children from a former relationship.

- married with a home, children from former relationships and a Business

Divorced 

- Divorced

Own a Business

- Own a business

or if you are just:

Filthy rich.

 

This book, How to Write a Tax Efficient Will, is all you need and is taylored to your personal circumstances.  

• Language: English
• Publisher: Deborah Bowers
• Release date: Mar 7, 2023
• ISBN: 9798215676783

Book preview

DISCLAIMER

This book is intended as a general guide, not legal, inheritance tax, or other professional advice. The complexity of the principles herein has been watered down in the interest of clarity while maintaining the core principles.

This publication does not provide a complete view of all areas of Will writing or inheritance tax, nor are those areas of the law addressed in every detail. Inheritance tax is an ever-changing dimension of law. The law of Wills may change with time, but every effort has been made while writing to represent the current state of the law.

The names used in this book are fictitious and are not personally known to me, nor do they refer to anyone in society. Persons reading this work should not assume that the examples given are connected to them in any way.

The examples are randomly chosen for illustrative purposes only.

This guide is intended to discuss matters of Will writing and inheritance tax applicable to England and Wales. Reference may be made to the law of Scotland, where the considerations governing the writing of Wills and the law of intestacy differ to some degree from the laws of England and Wales. Where reference is made to Scottish Wills, the applicable practices in Scotland will be discussed.

Readers are advised to seek independent professional advice or verify this book’s content before relying on its content. The Author has made every effort to ensure that the information contained in this book is applicable and accurate as of the date of publication; however, the Author will be exempt from liability in relation to any reliance placed on the contents of this book which results in economic or other loss.

The validity of a Will depends on it complying with the law, case law, or judicial precedents. The law and guidance are subject to change as parliament reviews and amends legislation. Readers are reminded to ensure they comply with acceptable standards and principles of validity at all times. Every effort has been made to reflect current laws and best practices in this work.

In publishing this book, the Author has relied upon her experience in the field of Will Writing, her knowledge, having successfully completed the Advanced Will Writing Exams of the Society of Trust and Estate Practitioners, frequently referred to as (STEP), and her training as a Solicitor of England and Wales. However, the Author acknowledges that based on the circumstances and needs of a client, the ability to write a tax-efficient Will can be a complex and intricate matter or as straightforward as ABC. Everyone’s circumstances are different, and only after carefully considering the client’s circumstances will a Will Writer be in a position to provide specific advice instead of the general and generic advice provided herein.

INTRODUCTION

In 2020, with the arrival of coronavirus (COVID-19) in the United Kingdom, I began to receive increased calls from friends and relatives who wanted to understand how to write a Will and the impact of inheritance tax on their decisions. It occurred to me that I was not aware of any book that brings these two things together in a manner that everyday families can understand, appreciate, and apply.

Many books on Will writing are generally too taxing for most to read, and to get real value, you may need to part with a bit more cash than you can afford in these challenging times. This is because many such texts cater to the Will Writing Practitioner, not the everyday family.

The field of inheritance tax is complex and is subject to change with each budget, thus adding to the confusion and intimidation for most families when they begin to think about writing a tax-efficient Will. I, therefore, decided to embark upon writing this book in an attempt to bridge this gap.

Families are reminded to seek independent legal advice. This book offers clarity concerning the matters to be considered and the steps to be taken to ensure that your Will reflects your wishes, having taken into account your inheritance tax position. This book arms readers with knowledge that may enable them to feel confident enough to undertake the writing of their own Will. Alternatively, it may put them in a position to speak confidently with a Will Writing Practitioner, posing relevant questions, thereby achieving their desired outcome.

It should be remembered that a Will takes effect at the death of the person who wrote it. Discussions of instruments such as Trust are discussed in this work in relation to how a trust is created in your will to take effect upon death. In this 2023/2024 second edition of How to Write a Tax-Efficient Will, we discuss new matters such as Lasting Powers of Attorney. We are all aging, and you may already have responsibility for an aging parent or grandparent. It is important that we understand how Lasting Powers of Attorney (LPA) can be used. They are not just essential for aging people; even young persons can put them in place as a security measure to protect their families. You will also be provided with references to get further information.

It is not possible to cover all eventualities. Still, every effort has been made to discuss the subject of Wills through the life of an everyday person, who may start as single, form a relationship, experience divorce or a breakup, or just live with another in a common law relationship.

The world is diverse, and we often think the grass is greener on the other side. This may persuade us to purchase a home abroad, where we can enjoy a bit of sun, sea, and sand. The impacts of such changes are not discussed in any detail here. In such circumstances, it is best to consult the laws of the territory where the property has been purchased.

Further, we never really know who we may fall in love with. This book covers having a spouse or civil partner who is not British or not a UK domicile. The use of technical language has been avoided as much as possible, but some words such as domicile cannot be avoided. As you read this book, you may recall the dilemma of the wife of the former Chancellor of the Exchequer, Rishi Sunak, who was not obliged to pay tax in the United Kingdom as she was a foreign domicile. Knowledge of the rules surrounding domicile can be a great tax-saving tactic when you have a spouse from a foreign jurisdiction. The rules do not apply to every foreign jurisdiction, but would it not be good to know if it applies to your circumstances?

For more complex circumstances where there is a business to take into account or a provision to be made for a disabled child or children, it may be best to speak with your Tax Advisor, Will Writing Practitioner or Estate Planning Solicitor. Such matters will be addressed here only to the extent necessary to alert the reader to seek specialist advice or raise matters for consideration.

This book is written with the law of England and Wales in mind, but reference is made to the laws of Scotland and how it addresses some of the concerns raised herein, such as intestacy or dying without a will. The main difference is that a person aged sixteen can hold property in Scotland, whereas in England and Wales, the age of majority is eighteen years old. Additionally, the distribution of your estate on intestacy is different in Scotland compared to England and Wales.

A flowchart has been provided in the Appendix for both Scotland and England. Frequently forgotten are the rules relating to domicile when advising those from Scotland on the importance of drafting a Will. If they are found to be domiciled in Scotland at the time of death and have failed to write a Will, their estate will be distributed in accordance with the intestacy rules of Scotland, despite them possibly having lived in England and Wales for many years. This is valuable advice that must be explored or given to all Scots when considering the necessity for a Will. The Scots do not escape the 40% inheritance tax should their estates meet the relevant criteria.

You may subscribe and follow me on YouTube, where you will find valuable free content by searching for Deborah Bowers Channel.

Or by visiting: https://www.youtube.com/channel/UCgJHrKI6u7CocwKS_3KUkVw

Or join my Facebook group: Tax Efficient Wills UK

Remember, anyone can write a valid Will if they follow the formalities, but not everyone can write a tax- efficient Will.

CHAPTER 1

WHY WRITE A WILL?

In this chapter, we shall discuss what a Will is, whether you should consider writing one, and how writing one may help you save on inheritance tax. We shall also look at what criteria need to be satisfied to ensure that your Will is valid.

This is not a book intended to instruct you on the law of Wills, but rather one aiming to bridge the gap in the minds of most people, between Will writing and inheritance tax. Discussions on the law will be brief, restricted to necessary guidance, to assist the reader’s understanding of common terms used in Will writing.

A Will is a declaration of how you would like your assets to be managed or distributed on your death.

If you have not made a Will at the time of your death, your assets will be divided in accordance with the laws of intestacy, which apply to the jurisdiction where you are domiciled. For example, if you have lived in England and Wales all your life, then your property will be distributed per the laws governing the distribution of assets when a person dies without a Will in England and Wales. This is what is commonly refer to as Intestate. For those who live in Scotland or are domiciled there, their assets will be determined following the laws of intestacy in Scotland.

In Appendix IV, I have provided a chart showing how the law of England and Wales distributes the assets of a person who has died without a Will in England and Wales. In Appendix V, there is a chart showing how the law of