Inheritance Tax Planning

Over the past 10 years, HM Revenue & Customs have doubled the money it receives from Inheritance Tax. Changes in the economy such as increased house prices and personal wealth have contributed to pushing more and more people over the current Inheritance Tax threshold or Nil Rate Band (£300,000 from 6 April 2007). On death an estate could face a hefty IHT tax bill of 40% on anything over the threshold.

You can reduce the potential IHT liability through a number of legitimate means; Ensuring that an adequate personal Will is in place, using the annual gifting exemptions and approved tax mitigation planning Trusts.

Creating a Trust enables the donor (‘Settlor’) to gift during their lifetime to specifically named or range of beneficiaries, such as children and grandchildren, to ensure that assets are looked after in accordance with their wishes. Trustees are appointed to legally hold the assets for the benefit of the beneficiaries. This takes the asset out of the donor’s estate, but there are still potential tax implications depending on the type of Trust set up. CA can advise you on suitable IHT and Wealth preservation solutions.

A Will should ideally be reviewed every 5 years and immediately updated in line with important changes in your life, such as birth of child, divorce, re-marriage, death of a spouse or winning the Lottery! If you need to review or update your Will, CA will be happy to put you in touch with one of our solicitor connections.