Inheritance Tax Planning

Inheritance Tax Specialist services

Like all tax planning, Inheritance tax planning is much more complex than many advisers appreciate. Bluebond Tax planning provides with a good understanding of both the legal side and the financial planning side, which is essential to provide you with the most suitable IHT advice.

Is Inheritance Tax (IHT) likely to affect me?

  • As a rough guide, if your assets exceed £325,000 (known as the Nil Rate Band or NRB)  the excess will be taxed at 40%. If you are married or widowed your executors can now claim two allowances thus meaning you do not have a problem if you die with assets below £650,000. Of course, it is not as simple as this. If you own a home you will have an additional allowance called the residential nil rate band which will be £175,000 per person by 6th April 2020.
  • Inheritance tax – IHT is usually only payable on the second death within a married couple providing suitable Wills have been drawn up leaving the excess over the NRB to the surviving spouse.
  • As IHT is charged on the second death you should, of course, do some projections as to what your estate will be worth at that time as in many cases your estate value grows faster than the NRB allowances. In many cases, where property or properties in the south of the UK are the main assets the IHT liability can almost double every 10 -12 years.
  • Most people fail to project forward the value of their assets over the time of their perceived lifetimes and so believe they will not have a large IHT liability. This is a serious error – take the time to get the projections or call or email us and we can do them for you

Inheritance Tax Advice from Bluebond Tax Planning

We do 3 main things for you to make sure IHT Advice given is all the way effective:

Help you to ensure your financial plans align with your life plans

Help you grow, manage and protect your wealth from inheritance tax.

Help you ensure your assets are passed to your children tax efficiently.

Ways to avoid Inheritance Tax

Life Insurance

Using Life Insurance to avoid IHT is popular method but usually an expensive route for most clients.

Trust Funds

A Lifetime Trust is basically a Discretionary Trust, set up to protect your assets for your own bloodline.

Property Gifting

The simplest method may seem to be to gift your home to your children. Simple, but fraught with danger and so best avoided.

IHT Gift Exemptions

There are quite a wide range of gifts that can be made to reduce your inheritance tax liability while you are alive.

Business Property Relief

Businesses can benefit from a more generous taxation system because of their role in providing economic growth and may qualify for Business Property Relief (BPR).

Family Investment Company

If you have assets over £2 million (excluding your main residence value), we may advise that you look into setting up a Family Investment Company (FIC).

Why Inheritance Tax Advice from Bluebond?

1. We are fully committed to building long term relationships with you.

3. We will always go the extra mile to ensure we deliver you financial peace of mind.

2. We make every effort to ensure you get the most suitable Inheritance tax advice in the areas we specialise in.

4. Excellent service is our standard practice.

How is Inheritance Tax calculated?

  • As Inheritance tax specialist advisers, we have a specialist inheritance tax calculator which we use to help clients and prospective clients get a much better idea of their actual probable liability. From this point of true calculation, it’s better to determine the most suitable strategies to resolve the inheritance tax problem.

Rule of thumb if you do not have access to this software: Use this link to calculate your IHT and once you have calculated your liability ( if most of your money is in your home ) double it every 10 years to give yourself a better idea. However its definitely much better to call us for help

Our IHT Advice objectives

    • Help you to gain a true understanding of the complexities involved and the alternatives open to you.
    • Help to define your estate planning goals within the framework of your lifetime requirements.
    • Provide a written plan recommending solutions and implementation strategies to help you achieve your goals.
    • Meet with you and your beneficiaries to fully explain the recommended solutions and strategies.
    • Help to ensure the required, often complex, paperwork is processed efficiently and accurately to completion.
    • Review your plans annually by post and advise you if any changes are required.
    • Offer you a meeting at least every 3 years to ensure your plan is adjusted in line with your changing circumstances.

Inheritance Tax FAQ

What is Inheritance Tax Planning

Inheritance Tax planning is a process used to avoid Inheritance Tax on your estate on your death.  As a rough guide, if your assets exceed £325,000 (known as the Nil Rate Band or NRB) the excess will be taxed at 40%.

If you are married or widowed, your executors can now claim two allowances thus meaning you do not have a problem if you die with assets below £650,000. Of course, it is not as simple as this. If you own a home, you will have an additional allowance called the residential nil rate band which will be £175,000 per person by 6th April 2020.

How is Inheritance Tax Paid

Inheritance Tax – IHT is usually only payable on the second death within a married couple providing suitable Wills have been drawn up leaving the excess over the NRB to the surviving spouse.

As IHT is charged on the second death you should, of course, do some projections as to what your estate will be worth at that time as in many cases your estate value grows faster than the NRB allowances. In many cases, where property or properties in the south of the UK are the main assets, the IHT liability can almost double every 10 -12 years.

What are Inheritance Tax Rules

The rules regarding Inheritance Tax were changed in October 2006 and so if you have not had your existing Wills reviewed since that time is advised to do so. All new clients who proceed with ourAdvanced Wealth Protection Plan will have new wills included as part of the plan.

Most people fail to project forward the value of their assets over the time of their perceived lifetimes and so believe they will not have a large IHT liability. This is a serious error – take the time to get the projections or engage us to do them for you.

Inheritance Tax and Life insurance

Life Assurance is usually the most expensive route and does not avoid the tax but provides the funds to pay it. There are many more cost-effective ways, but basically, it involves giving assets away, either directly or into trust. We do not recommend giving assets directly to your children as they may get divorced and lose your money or even worse you may lose your home. You can find more information about this issue here.

Avoiding Inheritance Tax through Trusts

Trusts are usually a better route than Life insurance as they enable you and your beneficiaries to not only avoid the Inheritance Tax after seven years but also help keep control of the assets in the event divorce or bankruptcy of your children. If set up correctly they can also help avoid care home fees.

However, before you give assets away, you need to ensure that you are financially secure for the rest of your natural life. The good news is that money placed into a trust can also continue to supply you with an income stream for life. An experienced Inheritance Tax and Estate planning adviser is essential for your peace of mind in this area.

Avoid paying Inheritance tax with our FREE video tutorial

Find the best way how to avoid Inheritance tax with the most comprehensive video course on UK Inheritance tax. This video guide from our IHT specialist is available for everyone interested in paying zero Inheritance tax and retaining hard earned wealth for their family.

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