Funding a potential Inheritance Tax liability
After taking the appropriate steps to put in place an Inheritance Tax planning strategy, if there is still the potential likelihood of a liability on your estate or if you have made gifts which have created a potential liability for the recipients if you die within seven years, we can help you review how you could fund this liability in the most efficient way.
Managing wealth
We can advise you on a range of different trust solutions, each designed with a particular purpose in mind.
Helping you control and protect your assets
One of the most effective ways you can manage your estate planning is through setting up a trust. The structures into which you can transfer your assets can have lasting consequences for you and your family, so it is important that you obtain professional advice
as the right structures can protect assets and give your family lasting benefits.
Getting the full benefit
A gift with reservation is a gift that is not fully given away. Where gifts with reservation were made on or after 18 March 1986, you can include the assets as part of your estate, but there is no seven-year limit as there is for outright gifts. A gift may begin as a gift with reservation, but some time later the reservation may cease.
Passing on parts of your estate
There are some important exemptions that allow you to legally pass your estate on to others, both before and after your death, without it being subject to Inheritance Tax.
Sharing out your estate
Planning your finances in advance should help you ensure that when you die, everything you own goes where you want it to. Making a Will is the first step in ensuring that your estate is shared out exactly as you want it to be.
How much Inheritance Tax could you potentially have to pay?
To estimate how much Inheritance Tax you may have to pay, add up the value of all your wealth, subtract your liabilities and the £325,000 nil rate band allowance, and then multiply the remainder by 40%.
Arriving at the amount of Inheritance Tax payable
To arrive at the amount of Inheritance Tax potentially payable when valuing your estate, you need to include assets (property, possessions, investments and money) you own and certain assets you have given away during the last seven years. The valuation must accurately reflect what those assets would reasonably receive in the current open market.
The later you leave it, the more limited your options will be
Successful planning is dependent on getting the foundations right, and it is most effective when it is conducted early. The later you leave it, the more limited your options will be. Current rules mean that the survivor of a marriage or registered civil partnership can benefit from up to double the Inheritance Tax threshold – 650,000 in the current tax year, in addition to the entitlement to the full spouse relief.
Is it time to evaluate your estate?
We can help you evaluate the size of your estate—which could include assets such as property, pensions, shares and personal property—and identify the opportunities that will help you avoid or reduce the amount of Inheritance Tax your family will have to pay on your estate and enable you to preserve wealth for your dependants if the worst comes to the worst.