Estate Planning Advice

If your assets are worth more than the current “nil rate band”, a large chunk of your estate could end up with the Chancellor through inheritance tax.

We have many solutions for inheritance tax issues, ranging from the use of offshore bonds and trusts to simple life assurance products.

Basic estate planning can be as simple as making a will (or updating an existing one).

Planning to reduce and/or mitigate your estate’s liability to inheritance tax is another important aspect. There are many ways to achieve this, but it's important to get proper financial & legal advice to ensure that as much of your estate as possible ends up with your intended beneficiaries.

Tips for Successful Estate Planning

1. Wills

• Married couples and civil partners should make the most of their transferable nil rate bands. If you are a widow who has remarried, there may be an extra nil rate band available to you.
• Make the most of business property, which attracts 100% relief from IHT – don’t miss the chance to use the relief twice (called ‘double-dipping’). The reason for this generous relief is to facilitate the passing on of family businesses without family members having to worry about the impact of IHT. Similar rules apply to owners of agricultural property. Your legal adviser can provide more information. Any will needs to be regularly reviewed by a legal professional, who can advise you on the points above – we’d be happy to introduce you to one of our trusted advisers.

2. Investments

• Make the most of Business Property Relief and Agricultural Property Relief from IHT – AIM shares, farmland and commercial woodlands can become exempt after two years’ ownership.

3. Lifetime Gifts

• Use the annual allowances (currently £3,000* per person).
• Gifts made as normal expenditure out of surplus income are IHT free.
• Consider Loan Trusts and/or Discounted Gift Trusts – you can keep a 5% annual ‘income’ and it’s income tax free. 

4. Deed of Variation

• If inheriting from someone who died less than 2 years ago, consider diverting part or all of the inheritance. For example, if you receive an inheritance from your parents which you don’t need, you could put it into a trust for your children and grandchildren so that it’s not taxed on your death.