Along with capital gains tax, inheritance tax (IHT) is often referred to as a voluntary tax. With careful planning, it is often possible to mitigate or totally remove this tax cost.
When advising you in this respect, we shall also fully explain to you the potential implications of such planning on your access to income and capital during your later years.
Before commencing any detailed IHT review or planning, it is important to determine what your overall IHT strategy is, which will usually fall into one of the following model tax strategies:
- Maintain wealth in the form most convenient to you and do not worry about IHT,
- Give everything away (except perhaps the IHT nil rate band(s)) and hope to survive for 7 years,
- Take out life insurance to fund the expected IHT liability,
- Follow a balanced approach, combining re-structuring of affairs to maximise eligibility to IHT reliefs, gifting assets that do not produce income to the next generation and taking out life cover for the residual IHT liability.
Depending on the circumstances, their are numerous ways to mitigate this tax:
- Creating life time trusts,
- Making life time gifts of chargeable assets and surviving 7 years,
- Tax efficient writing of Wills,
- Making a post death deed of family arrangement,
- Re-structuring your overall investment portfolio to hold assets that will be eligible for Business Property Relief and Agricultural Property Relief.
The most popular inheritance tax service we offer is valuing your current estate:
We will then review the intestacy rules and your current Will, then calculate your current inheritance tax exposure. We shall then discuss your options for restructuring your affairs and rewriting your Will, to reduce this tax. We shall also discuss with you whether you should take out life cover, to insure against the residual liability.
Most people consider inheritance tax as an unwelcome reduction in the inheritance passed on to the next generation. As well as seeking to reduce this tax, our tax technicians will prepare all of the necessary paperwork and communicate with your Solicitor, so that you have peace of mind that your final tax affairs will be dealt with in a professional manner that you have come to expect.