Preserving Wealth for generations
How much IHT will my beneficiaries pay?
What is the nil rate band and residential nil rate band?
How do trusts work?
Estate and Inheritance Tax Planning that gives you control.
Estate or inheritance planning is simply outlining what you want to happen to your estate when you’re no longer here. A robust plan using tax efficient measures including wills and trusts could help you protect your assets and help your loved ones.
Generational Wealth
Estate planning is not just for the wealthy. Largely due to the enhanced value of homes in the UK, it is predicted that £400 billion will be passed from grandparents to the next generation over the next 10 years, the majority of which will be above the inheritance tax threshold.
We will work with you to estimate your potential inheritance tax obligations and provide you with tailored advice on how to manage these requirements.
Common considerations include:
- Utilising available tax allowances and exemptions
- Using tax efficient investments
- Taking insurance to cover your bill
- Reducing your estate by making tax-free gifts
Annual reviews to keep you on track.
It is important to keep your personal financial plan on track, including looking at any changes in your circumstances, and regular annual reviews are key.
Our industry-leading software produces an easy-to-follow timeline that gives you an idea of what your long-term financial position is. This timeline takes you from today to beyond your retirement, providing valuable insights.
Estate Planning FAQs
Inheritance tax planning, often referred to as estate planning or IHT (Inheritance Tax) planning, is the process of strategically organizing your financial affairs to minimize the amount of inheritance tax that your heirs or beneficiaries will have to pay upon your death.
In the United Kingdom, inheritance tax is levied on the value of your estate, including your assets, possessions, and property, above a certain threshold.
Proper planning can help reduce the impact of inheritance tax and ensure that more of your wealth is passed on to your loved ones.
Understanding the Nil Rate Band and Residence Nil Rate Band: In the UK, there is a threshold below which no inheritance tax is due. The standard threshold is £325,000, known as the Nil Rate Band (NRB). Additionally, the Residence Nil Rate Band (RNRB) allows for an extra threshold if you pass on your main residence to direct descendants, such as children or grandchildren. These thresholds can change over time, so it’s essential to stay updated on the current figures.
Tax-Exempt Gifts: Certain gifts and exemptions are not subject to inheritance tax. These can include gifts to a spouse or civil partner, gifts to charities, and small gifts up to a certain limit. Lifetime gifts made more than seven years before your death are also typically exempt.
Using Trusts: Setting up trusts can be a powerful tool in inheritance tax planning. Various types of trusts can be used to hold and manage assets for the benefit of your chosen beneficiaries, while potentially reducing the taxable value of your estate.
Life Insurance: Some individuals use life insurance policies to provide a source of funds that can cover the cost of inheritance tax liabilities.
Making a Will: Having a well-structured and up to date will is crucial for effective inheritance tax planning. It allows you to specify how your assets should be distributed and may include provisions to minimize inheritance tax.
Inheritance tax planning can be complex, and the rules and regulations may change. We can help you create a tailored plan that suits your specific circumstances and goals.
Pensions can be used for inheritance tax planning in several ways to help reduce the potential inheritance tax liability on your estate. However, it’s important to note that the rules and regulations surrounding pensions and inheritance tax can be complex and may change over time.
Death Benefits Nomination: When you have a Defined Contribution pension, you can nominate beneficiaries to receive your pension funds in the event of your death. By carefully selecting beneficiaries, you can ensure that your pension assets pass directly to your loved ones outside of your estate, potentially reducing the value of your estate for inheritance tax purposes.
Spousal or Dependent Benefits: If you’re married or in a civil partnership, your pension can typically pass to your spouse or civil partner without inheritance tax. This is often achieved by designating your spouse or partner as the primary beneficiary. Ensure that you have the correct nomination in place for this purpose.
It’s crucial to note that pension rules and tax laws can change, and the strategies for using pensions in inheritance tax planning may evolve accordingly. Regularly review your pension and estate planning arrangements to ensure they remain effective in achieving your goals and staying compliant with current regulations.