Estate Planning

Many people are aware that if their estate is over a certain amount, their relatives or beneficiaries of their will may have to pay inheritance tax before receiving any funds from their estate. But the rules, as you would expect, are not simple. At a tax rate of 40%, many will lose out by giving away huge amounts of tax after they pass.

We can help explain the rules and tailor a plan for you, your circumstances and your goals.

The rules on inheritance tax are not clear for most, many families end up paying this tax, when it could be mitigated. 

What are the main options to mitigate or reduce this tax (the following represents a simplified view of some of the options that can be considered and cannot be construed as advice):

  1. Spend it – have some fun with the money, whilst reducing your estates value along the way. Obviously live within your means as well.
  2. Gift it – there are rules here, such as the 7 year gifting rule for tax and gifting allowance, but not all gifts need to be included in this rule and the tax level can reduce over time. Many are not comfortable simply gifting their money away, so it’s not a solution for everyone.
  1. Trusts – using trusts can be a great way for many to set rules on how their money will be inherited and also can help reduce the potential tax burden. Trusts tend to sit outside of a persons estate, but can have their own tax structures. Trusts are complex areas and we strongly suggest seeking advice.
  1. Insurance – a policy such as a whole of life policy can mean the tax burden is covered by the insurance. It can be expensive and is certainly not an option for all, but other insurance solutions can also help.

  2. Investments – certain investments can mean the invested money sits outside of the persons estate after two or five years. Investing in a pension might also be a solution for some, as a pension balance sits outside of a persons estate.

  3. Charitable Giving. The estate can leave money to charity, which can reduce the level of inheritance tax paid if certain rules are met.

A financial adviser can help guide you (or your family) through the best options. This is a tax very few should pay, advice can help save lot of money.

As Independent Financial Advisers, we can choose from products across the full market and are not restricted to a panel of funds/providers. We can also help with making your investment as tax efficient as possible, whilst still meeting your goals.

Our ethos of best in industry communication and service, will ensure you are fully aware of how our recommendations meet your needs and goals, and we are always here to answer any questions you may have.

With no charge for any initial meeting, and all charges given in full before you commit to anything, why not get in touch?

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