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Talk online to an Inheritance Tax Expert
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Talk online to an Inheritance Tax Expert
Find out why getting specialist inheritance tax advice from us is simpler and more cost effective than using a lawyer, accountant or financial adviser.
Frank Hibberd – Retired gentleman – IHT advice
It is gratifying to finally come across an adviser who gives sensible ongoing advice which is very client focused. In our case in particular, it is nice to know that we now have high degree of certainty on our Inheritance tax liabilities for the future.
Tony & Sue Perriss – IHT and Estate planning
I am writing to thank you for your help on our Inheritance Tax and Estate planning. It is nice to know that we can now be certain that our daughter will inherit our money without giving a large slice of it to the government – unless we decide to spend it first.
Life Assurance is usually the most expensive route and does not avoid the tax but provides the funds to pay it. There are many other more cost-effective ways, but basically, it involves giving assets away, either directly or into a Trust.
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.
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.
Some clients whose assets are large may wish to retain assets in excess of their IHT allowances. This will mean they are liable to Inheritance Tax and so life insurance to pay the inheritance tax is essential.
However, paying for life insurance is usually an expensive option when comparing the long-term premiums against the cost of setting up a trust.
Married couples (or civil partners) who are both UK domiciled or people who have been UK resident for over 15 out of the last 20 tax years will have a Nil Rate Band (NRB) allowance each which can be passed on to their surviving spouse if unused on death.
Currently, the allowance is £325,000 each which means a surviving spouse who inherits a full NRB allowance can hold up to £650,000 in their estate before Inheritance Tax is payable. Should they wish to hold a higher level than they could insure against the 40% tax by insuring 40% of the excess estate to pay out on death.
Although this is the default advice route for most inexperienced Inheritance Tax advisers, Bluebond Tax Planning does not arrange this type of cover but will refer you to a separate firm of independent financial advisers should you decide you require it as we acknowledge that Life Assurance services do have their place in a comprehensive plan to mitigate Inheritance Tax.
This ensures that your assets are passed on to the people that you want them to go to, and nobody else. They will go to ‘the right hands at the right time’.
Before transferring any assets, you should take into account your financial position, and ensure that your lifestyle needs are met before any tax advice, and Estate planning proposals are put in place.
Trusts, and their legal wording, are a complex area, and you should always use experienced professionals to carry out your financial planning and guard your interests.
Firstly we would like to point out that it is very rare to get any sort of service guarantee from a professional services company.
We want you to be delighted with the work we do for you. We are therefore pleased to offer you an unconditional guarantee on our initial advice service. If our initial advice service falls short of your expectations for any individual transaction, we will refund any amount that you consider to be appropriate, up to the total fee for that transaction, irrespective of our views.
As a small business owner, you may choose to sell or wind up your business rather than leave it to the beneficiaries of your Will. You would then be able to leave the liquid capital to your beneficiaries instead.
This has the advantage that the value of the business would be precisely fixed and available in cash. However, cash does not qualify for Business Relief, so this approach has significant IHT drawbacks. Experienced advice is essential.
Talk online to an Inheritance Tax Expert
Find out why getting specialist inheritance tax advice from us is simpler and more cost effective than using a lawyer, accountant or financial adviser.
Frank Hibberd – Retired gentleman – IHT advice
It is gratifying to finally come across an adviser who gives sensible ongoing advice which is very client focused. In our case in particular, it is nice to know that we now have high degree of certainty on our Inheritance tax liabilities for the future.
Tony & Sue Perriss – IHT and Estate planning
I am writing to thank you for your help on our Inheritance Tax and Estate planning. It is nice to know that we can now be certain that our daughter will inherit our money without giving a large slice of it to the government – unless we decide to spend it first.
Life Assurance is usually the most expensive route and does not avoid the tax but provides the funds to pay it. There are many other more cost-effective ways, but basically, it involves giving assets away, either directly or into a Trust.
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.
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.
Some clients whose assets are large may wish to retain assets in excess of their IHT allowances. This will mean they are liable to Inheritance Tax and so life insurance to pay the inheritance tax is essential.
However, paying for life insurance is usually an expensive option when comparing the long-term premiums against the cost of setting up a trust.
Married couples (or civil partners) who are both UK domiciled or people who have been UK resident for over 15 out of the last 20 tax years will have a Nil Rate Band (NRB) allowance each which can be passed on to their surviving spouse if unused on death.
Currently, the allowance is £325,000 each which means a surviving spouse who inherits a full NRB allowance can hold up to £650,000 in their estate before Inheritance Tax is payable. Should they wish to hold a higher level than they could insure against the 40% tax by insuring 40% of the excess estate to pay out on death.
Although this is the default advice route for most inexperienced Inheritance Tax advisers, Bluebond Tax Planning does not arrange this type of cover but will refer you to a separate firm of independent financial advisers should you decide you require it as we acknowledge that Life Assurance services do have their place in a comprehensive plan to mitigate Inheritance Tax.
This ensures that your assets are passed on to the people that you want them to go to, and nobody else. They will go to ‘the right hands at the right time’.
Before transferring any assets, you should take into account your financial position, and ensure that your lifestyle needs are met before any tax advice, and Estate planning proposals are put in place.
Trusts, and their legal wording, are a complex area, and you should always use experienced professionals to carry out your financial planning and guard your interests.
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Firstly we would like to point out that it is very rare to get any sort of service guarantee from a professional services company.
We want you to be delighted with the work we do for you. We are therefore pleased to offer you an unconditional guarantee on our initial advice service. If our initial advice service falls short of your expectations for any individual transaction, we will refund any amount that you consider to be appropriate, up to the total fee for that transaction, irrespective of our views.
As a small business owner, you may choose to sell or wind up your business rather than leave it to the beneficiaries of your Will. You would then be able to leave the liquid capital to your beneficiaries instead.
This has the advantage that the value of the business would be precisely fixed and available in cash. However, cash does not qualify for Business Relief, so this approach has significant IHT drawbacks. Experienced advice is essential.
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.
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.
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 our Advanced 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.
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.
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 of 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.
As Inheritance Tax 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, you should speak with us directly for a more accurate understanding.
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.
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.
