Estate and Inheritance Tax Planning
Without good advice and careful planning, HM Revenue and Customs could be the biggest single beneficiary when you die.
Inheritance Tax (IHT) has an increasingly broad reach and its impact on a modest estate can be dramatic. On a large estate this can be 40% on anything above any available allowances.
There are various ways you can make the best of IHT planning:
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Have your Will written and planned correctly to save the maximum amount of tax
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Transfer assets through prudent use of lifetime gifts
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Use of Trusts
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Create a tax-efficient fund so that your beneficiaries can pay any taxes due without dipping into their inheritance. Under current IHT legislation, pensions can play a considerable role here.
Gifting
Gifting money away during your lifetime is a viable option to reduce the value of your estate, whether to family, friends or charity. There are currently a number of allowances, exemptions and options that exist, and with careful planning around this subject, it is possible to distribute your wealth in a tax efficient manner.
We can help you to understand which options are available and best suited to your individual circumstances.
Use of Trusts
Using trusts as part of your estate planing can be a good way to release money or assets from your estate for Inheritance Tax purposes, whilst at the same time retaining a level of control over it.
There are many different types of trust and each have their own specific benefits and drawbacks, and our advisers can help advise on the suitability of these, depending on your personal situation.
Your Pension
Pensions are one of the most tax efficient investment strategies available, but they also have the added benefit of generally sitting outside of your estate for inheritance tax. Where possible, utilising other aspects of your estate, such as excess cash, ISAs, general investments and property for example, all of which will be automatically included in your estate, should be used to fund retirement, potentially leaving the value of your pension pot to be passed on, tax free.
Other
There are some other investment products which can be utilised for effective estate planning, but due to their high risk nature, they will only be recommended to certain clients who fit certain criteria.
The value of pensions and investments and the income they produce can go down as well as up and you may not get back the full amount that you originally invested
The Financial Conduct Authority does not regulate Tax Planning, Trusts or Will Writing.