Inheritance Tax Planning

Looking after the family

No one likes to think about dying. Whether you’re young or you’re getting old, it is the sort of topic you don’t chat about over dinner. Even advisers can feel reluctant to bring the subject up without being prompted by a client.

When you are younger, you will need to think about who will be guardian for your children if the worst happens, how your children will be supported until they grow up, and who do you trust to make the important decisions for you when you are not here.

As you get older, you may want to establish your children in their chosen field, perhaps help them with a house deposit, but also retain enough wealth for your own future needs. If you have a family business, you may want to involve your children in its management but retain control, and balance competing interests of children who do not want to work in the business but you still want to benefit.

These are all family decisions that should be considered in the round and discussed thoroughly so that there is an agreed way forward. 

We recommend that you review your position regularly and certainly at key milestones such as births and marriages as well as deaths.

You need to ensure you have drawn up a will that reflects your wishes and is structured to take into consideration the impact of Inheritance Tax (IHT).

Gifting

A gift that is made more than seven years prior to death is not subject to inheritance tax, and this can allow assets to be passed down through the generations in a tax efficient manner where an estate is large enough.

It is also possible to make gifts out of income without triggering inheritance tax charges provided this does not affect the standard of living of the person making the gift. This is a complex area but can be useful where someone does not want to give away a capital asset but they can afford to make a gift of income for a few years.

Business Owners

Business Property Relief is invaluable for owners of trading businesses, as this can shelter their business from IHT and allow it to be passed to the next generation.  However, owners of companies in particular will need to ensure those are structured in such a way to ensure that they will qualify for 100% Business Property Relief.

It is particularly important for owners of family businesses to keep on top of their IHT position and regularly monitor their cash and investment position as well as their business plan.

Non Doms

If you are non-domiciled for Inheritance Tax and you have property abroad, or if your spouse is non-domiciled, you will need specialist advice which we can provide.

Estate Planning

Estate planning goes beyond the tax implications of transferring assets to the next generation. It is about ensuring that your family is set for the future.

We can talk you through your ambitions and aspirations for your estate so that you can take informed decisions, such as when to exit a business, at the right time.

How we can help

The priority for most people is to ensure that their family will be financially secure. Which is why we provide a sensitive, considerate and professional service designed to protect your family's future.

How we’ve helped:

• Advised a family on long term IHT planning with the outcome that the majority of their wealth is now in the hands of the younger generation, but they still have an appropriate level of control as well as the income they need.
• We have advised on strategies to maximise Business Property Relief, to ensure that the business is not hit with a crippling IHT bill on the death of an owner.
• We worked hand-in-hand with a family to work out what they wanted for their future, and then implemented plans to achieve the appropriate safeguarding of assets in a tax efficient manner.