Inheritance Tax Planning

independent financial advisers & wealth managementIt is important to be a responsible manager of your personal resources. Paying unnecessary tax is not good management and therefore researching how to minimise inheritance tax is an exercise which should be carried out.

However, tax avoidance through deceitful practices is clearly not acceptable, but planning your estate in an orderly manner and using Inheritance tax exemptions offered by the Government, and accepted by HMRC is wise. How to reduce inheritance tax is a complex matter, which requires planning, and ideally should be addressed as early as possible to avoid inheritance tax being paid needlessly.

Inheritance Tax Planning Process

Our goal is to work closely with you on every step of your inheritance tax planning. From the initial meeting to completing the implementation of your plan, inheritance tax planning is a complex area with many different solutions to help you achieve your goals. It is not just about saving tax, but also about you deciding who, when and how much your beneficiaries receive. In addition this is a great opportunity to leave a legacy to something that matches your values, such as a charity, church or other good cause. The end result is peace of mind for you and your beneficiaries.

Our existing clients realised some of the following after working closely with a Trinity adviser on their inheritance tax plan.

  • The value of their estate was a lot higher than they thought.

  • They realised the full implications of what they had put in their will did not match their goals.

  • They did not realise that there were so many options and solutions.

  • They had peace of mind once everything had been implemented.

You will need to go through the following process in order to complete your inheritance tax planning.

  • Arrange a meeting with a fully qualified Trinity adviser
  • Calculate your net worth on death
  • Review your existing will and any other planning already in place
  • To establish your goals and complete an inheritance tax planning questionnaire
  • We will present to you the results from completing the questionnaire
  • Discuss the solutions and options available
  • Present to you a final plan with recommendations
  • Implement the recommendations

Inheritance tax advice is a core of Trinity’s business. As many of our clients are already in retirement, the complexity of the inheritance tax rules has made them grateful for the advice and support both they and their families (who ultimately would be paying tax on inheritance) have received from their Trinity adviser.

Calculating the Tax Liability

When calculating the potential tax liability you first have to calculate what your actual net worth might be on second death (after the death of your spouse). Below is an example calculation for a typical widowed client’s estate. The information below is based on a UK domiciled citizen, meaning that all their worldwide assets will be included in the calculation.

Assets Value
Property £650,000
2nd Property Abroad £100,000
Investments £350,000
Life Assurance £300,000
Chattels £40,000
Total £1,440,000
Less Gifts to Charities £40,000
Less Nil Rate Band (x 2) £650,000
Leaving taxable value £750,000
Tax due at 40% £300,000
Estate to distribute £1,100,000

The above shows that the beneficiaries would have to pay the Inland Revenue £300,000 in tax before the other funds are released to the beneficiaries.

If you would like Trinity to help you reduce this tax for you, then please click below and complete the response form.

Items to Consider

When looking at your estate and Inheritance Tax plan we take the following into consideration;
  • Your Goals
  • Your Age
  • Attitude to Risk
  • Your Health
  • Your present circumstances and likely changes
  • Cash and income requirements
  • Tax implication of any changes
  • The effects on the beneficiaries when they receive the funds
  • Legacies for Charitable or Religious organisations
  • Existing Trusts
  • Existing Will
  • Any Gifts
  • Existing Power of Attorney

Other issues we will take into consideration are;

  • Where Domiciled
  • Whether funds are held Onshore or Offshore
  • Gift Allowances
  • Tax status of investments
  • Deeds of Variation
  • Schemes available through investment houses
  • Schemes available from insurance companies
  • Schemes available through solicitors
  • Pre-owned assets tax liability
  • Any Gifts with reservations

There is a great deal to consider when organising your estate and Inheritance Tax planning.

If you would like Trinity to help you with your inheritance tax planning, then please click here and complete the response form.

To enquire about any of the above services – Financial Planning as well as the On-going Review Services please click here,
OR phone +44 (0)1727 851123 Fax +44 (0)1727 858083 or email us on info@twm.uk.com