Ex-Tax Adviser Explains: HMRC Doesn't Want You To Understand This (Buy, Borrow, Die)

Описание: In this video, I break down the famous Buy, Borrow, Die tax strategy, used in the US to minimise taxes. But crucially, I explain why the same approach doesn’t work when you’re dealing with HMRC in the UK.

We cover:
What the Buy Borrow Die strategy actually is
How wealthy individuals use assets and borrowing to reduce income tax
Capital Gains Tax vs Income Tax
How the IRS treats death vs how HMRC does
Why Buy, Borrow, Die falls apart under UK tax rules
Why Buy, Borrow, Sell, Gift, Die could be more effective in the UK
Why assets are taxed more favourably than earned income.

Most people rely on earned income, such as salary, bonuses and wages, but this is where tax rates are highest.

Wealthy individuals focus on building assets, because capital gains tax is generally lower than income tax, both in the US and under HMRC rules in the UK.

In the US, investors can buy appreciating assets, borrow against them tax-free, avoid selling, and pass them on with a step-up in basis, often avoiding income tax and capital gains tax along the way.

In the UK, there is a CGT step-up on death, but Inheritance Tax will apply on estates that exceed the nil rate band. That means you have to plan for both CGT and IHT together.

That’s why in the UK the strategy could be buy, borrow, sell, gift, die, whilst still understanding that the tax system rewards asset ownership far more than earned income.

TIMESTAMPS:
00:00 - Intro
01:20 - Assets vs income
03:30 - Borrow for a long time
06:00 - US vs UK
08:05 - Sell Gift Die
09:35 - Real life

WHO AM I:
I'm Kiran, a qualified Accountant and experienced tax professional living in the UK. I make videos about finance, tax and investing.

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DISCLAIMER:
This content, and the ideas presented in it, are for education and entertainment purposes only. Kiran does not provide tax or investment advice. The information presented does not consider the financial circumstances of any investor, and therefore may not be suitable for all investors.
Although Kiran is an Accountant, no Accountant-Client relationship is established with the viewer in any way.

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