Tax. It’s one of those words that gets emotions stirring. We know the benefits of tax to society but why do people seek to pay less? Often because they deem the tax they pay is unfair to them. I like another word, perspective. How can you see tax differently? With a new perspective? So tax ends up being fair to you.
You can build complicated structures in an effort to save tax today, but do you always save tax or do you think you have saved tax? There is a difference. In the world of inheritance tax, people make some crazy decisions…they clearly don’t think they are crazy at the time they make them but analysis can show many poor decisions are made. Why? Often the asset management industry wants to sell products that are deemed to save tax. As such, people will buy them. Why? They look and sound attractive. The narrative and stories used to save tax are great stories. And the stories can increase your anxiety about tax so that you buy a solution being sold to you. If you get anxious because of the perceived unfairness of tax, you are more likely to make an emotional decision rather than a logical one. The best outcome will be logical because it is well considered.
The next time you want to save tax, don’t get emotional. Let’s have a conversation about logic, not unfairness.