With MARK GREWER, of Hunter Gee Holroyd, Club Chambers, Museum Street, York, phone 01904 655202

OVER the last ten years the amount of Inheritance Tax (IHT) being paid by UK taxpayers has almost doubled. IHT used to be known as the wealth tax, but you don't have to be wealthy to pay it now!

Recent increases in property values mean that many middle income families own assets worth more than the amount you can pass on without paying IHT. This amount, known as the IHT nil rate band is currently only £263,000. Estates worth more than £263,000 are subject to IHT at the rate of 40 per cent.

Many families fail to plan for future IHT liabilities and face an unwelcome IHT bill on the death of a relative. The earlier this planning takes place the more likely it is to be beneficial. If, in common with many married couples, your will is set up to leave everything to your surviving spouse there will be no IHT to pay on the first death. However, the benefit of the valuable IHT nil rate band of £263,000 will be lost on the first death when all assets pass to the surviving spouse.

There are some simple steps you can take to help mitigate a future IHT liability. Among these steps are Will Planning (including the use of discretionary will trusts), making gifts to use annual IHT exemptions and putting existing insurance policies into trust. It is also possible to insure against your future IHT liability.

LAST month I asked you to consider what the purpose of your business is. This is the first stage in business planning. The next stage it to create a vision of where you want to be in, say, five years' time.

This vision should include consideration of:

The structure of your business

Where your business will be located

How many employees will you have

The type of working environment you want

What customer service levels you want to achieve

The mix of products and services that you would like to offer

What level of annual turnover you would like

The number of customers you want

The average income generated from each customer

It won't be easy! Once done, business owners should condense their thoughts into a short paragraph - a vision statement.

But it is important that discussion takes place with key team members, to ensure that they agree with the vision and to ask them if they would like anything further including within it.

Now I leave you with this thought - if you don't know where you are going, how can you expect to get there?

Updated: 09:45 Tuesday, June 22, 2004