Wills, Lasting Power of Attorneys and Inheritance Tax Planning

11th March 2024

Peace of mind for your family: Wills, Lasting Power of Attorneys and Inheritance Tax Planning.


Benjamin Franklin is famously quoted as saying that “nothing is certain except death and taxes”. It’s a sombre thought, but it is important to have the correct planning in place to ensure that your estate passes in accordance with your wishes and with minimal exposure to Inheritance Tax.


Wills and Inheritance Tax Planning

A Will is a legally binding document that sets out how your estate will be divided in the event of your death. One of the main reasons to make a Will is to reduce the Inheritance Tax payable on death and ensure that as much of your estate as possible passes to your loved ones.


The current rate of Inheritance Tax on death is 40%, so there is often a significant amount of Inheritance Tax at stake. However, there are certain planning points that can be incorporated into your Will to minimise your Inheritance Tax exposure:
  • Ensuring that your tax-free nil rate and residential nil rate bands are fully utilised.
  • Making use of the various exemptions, such as the spousal exemption.
  • Leaving a legacy to charity to qualify for the reduced 36% rate of Inheritance Tax on death.
  • Planning and structuring around the use of Will Trusts as part of onward family succession planning.



Lasting Power of Attorney and Inheritance Tax Planning

A Lasting Power of Attorney (LPA) is legal document that empowers a trusted individual to make decisions about your finances, healthcare, or both if you become unable to do so due to mental incapacity.

When considering estate and IHT planning an LPA is an important consideration because if you lose capacity, there is no immediate right for a relative or friend to act on your behalf; your bank accounts are effectively frozen and gaining access can be a costly and time-consuming process.

An LPA allows you to appoint a trusted individual to act on your behalf should you lose capacity. This ensures that the attorney can continue to maintain your estate, manage your investments, and retain access to your bank accounts.



Inheritance Tax Planning
It is a common misconception that Inheritance Tax is solely a ‘death tax’. However, the planning that we undertake during our lifetimes, in addition to creating a tax efficient Will, can often pay dividends on death. Certain things that can be considered during lifetime are as follows:
  • Making gifts during our lifetime to reduce the value of your estate on death. Most commonly this is making lifetime gifts, but settling assets into a lifetime Trust is also an option.
  • Making use of various annual exemptions and the ‘normal expenditure out of income’ exemption, where applicable.
  • Investing in assets or property which qualifies for either Business Property Relief or Agricultural Property Relief.



How can we help?

Whitings has an extensive private client team, with a wealth of experience advising on Inheritance Tax, Estate Planning and non-contentious Probate matters. We are able to advise on Wills, Lasting Powers of Attorney, and Inheritance Tax and pride ourselves on delivering a timely, proactive and high-quality service to the highest technical standards, tailored to individual circumstances, goals and objectives, by understanding what matters most to you and your family.


If you are worried about Inheritance Tax or would like to discuss your personal circumstances further, please get in touch with your local Whitings office or your usual Whitings contact.


Disclaimer - All information in this post was correct at time of writing.
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