by Liz Wilson

The Organization for Economic Cooperation and Development expects France to narrow its budgetdeficit at a faster pace after higher tax receipts last year helped reduce the shortfall more than planned.

Sarkozy has pledged to scrap payroll charges and income taxes on overtime hours, eliminate inheritance taxes for all but the richest 5 percent to 10 percent, and introduce a tax deduction for mortgage-interest payments as soon as the third quarter. 

Liz Wilson, a financial consultant with Belfast-based Money Life said: “When it comes to inheritance tax, most people have heard of it, but don’t think that it affects them - but this might not be the case. With house prices having risen the last few years, more and more people are falling into the inheritance tax trap, and Gordon Brown shows little sign of introducing an inheritance tax reduction of the magnitude pledged by France’s new president, Nicolas Sarkozy.”

“The way inheritance tax is calculated means that your estate, which is everything you own at the time of your death, is assessed by the taxman. If this adds up to more than £300,000, you’re potentially passing on a tax bill to your loved ones.”“With careful planning, there are solutions available which offer clients the control they need to keep the taxman’s hands off the things they’ve worked hard for.”

“It’s important to understand exactly how the new rules will affect retirement planning, and will depend on individual circumstances, which is why it is important to get expert advice. Some of the key changes include not being able to take pension benefits until age 55 (from April 2010); different options at retirement due to new annuity and income drawdown options; limits on how big pension funds can be, and how much you can pay into your pension each year and still get tax relief.

When it comes to inheritance tax, Prudence likes to plan.”