ESTATE PLANNING & INHERITANCE TAX

Do you know how much Inheritance Tax your Children and Beneficiaries will pay after your gone?

This is often something that many of our clients haven't thought about, but is an issue that all are keen to resolve. With the current Inheritance Tax rate at 40% after the personal allowance of £325,000 there is the risk that your children will have to fund a large inheritance tax bill on your death.

This can cause a number of issues:

  • Your children may not have the spare liquid capital to fund a tax bill from the HMRC
  • Assets may have to be sold to fund this tax bill.
  • If you own property this can be difficult to sell to pay the bill, leaving your children with difficulty in funding the tax bill.
  • Finally a large proportion of you wealth will pass to the HMRC and not to your intended beneficiaries.

By way of example, a couple with assets of £1,200,000 including a main residence £500,000, holiday home £250,000, a investment portfolio of £375,000, and other personal assets including cars and personal chattels of £75,000 may have to pay a Inheritance Tax Bill of £220,000 on assets above their Nil Rate Band.

As part of our Strategic Wealth Plan we would discuss with you what your wishes are for your estate, and then prepare an individual inheritance tax calculation taking account of all your assets, gifts you have made and who will receive the assets. We will then recommend a range of solutions to reduce or completely mitigate your liability, which may include:

  • To make use of all available exemptions, including the annual exemption.
  • Gifts to beneficiaries where this is affordable.
  • Setting up of a Trust to pass the assets to your beneficiaries.
  • To assess if you could make use of available reliefs from Inheritance tax.
  • To remove the financial burden of any potential tax bill from your children by funding this through investments or Insurance.

Read our case studying on David and Elizabeth who benefited from our Inheritance Tax advice.

View Case Study