A Will is a very effective vehicle for inheritance tax planning.
Inheritance tax planning
It is said that the only two certainties in life are death and taxes. Making a Will enables you to plan for both. When trying to minimise the inheritance tax payable on your estate, there are many different options available. When preparing your Will we shall assess your particular circumstances and the size of your estate and advise you on the most suitable options open to you.
Trusts
A trust is a vehicle which contains property or money that is controlled by you and/or a nominated third party (the trustees) for the benefit of a specific individual(s) (beneficiaries). Trusts are governed by complex legal regulations and separate tax rules. A trust may be set up any time during the life of an individual or by way of a Will upon death.
Saving inheritance tax
People these days tend to be more aware of the fact that inheritance tax (“IHT”) can be charged on their estate when they die. This is partly due to the increase in house prices over the last few decades which has taken many ordinary people who wouldn’t have previously worried about IHT into an inheritance tax paying bracket.
When we see new clients or review existing clients’ Wills, consideration is always given to possible inheritance tax saving measures that may be taken to reduce any liability to tax upon their death.
One method of saving inheritance tax is for an individual to make certain transfers during their lifetime which reduce the size of their estate. These lifetime transfers are exempt from inheritance tax if they are:-
- gifts to charity;
- the first £3,000 of transfers made by an individual in any one tax year (any unused annual exemption may be carried forward one year);
- small gifts to any number of different people not exceeding £250 to any one person per year.
- Gifts on marriage by a parent up to £5,000 and by a grand parent up to £2500
Potentially Exempt Transfers (PETS) are chargeable transfers where no charge applies at the time the transfer is made and which are exempt from any inheritance tax liability as long as the individual who made the transfer does not die within seven years of the transfer.
Inheritance tax planning devices may also be incorporated into an individual’s Will and our specialist lawyers will consider this with you if the opportunity for saving tax arises.
Tax Returns
We are able to provide a full and complete service relating to the completion of self-assessment Tax Returns and Tax Repayment claims for individuals and trustees, either in-house or through our relationships with well-respected firms of accountants both here in Devon and nationwide. The completion of Tax Returns also highlights opportunities which are available to reduce the impact not only of income tax and capital gains tax but also potential inheritance tax liabilities.
Maximising retirement income
Preferably before your retirement, we can carry out a review of your sources of income and put forward recommendations for reallocation of income sources to ensure maximum utilisation of personal allowances, exemptions and reliefs, both for married couples and individuals. Investment reorganisation carried out through one of the independent financial advisers we work with can also be effected to reduce chargeable income and gains.
Insurance services
We can assist in sourcing a full range of insurance facilities through the independent financial advisers we work with. They can arrange not only life insurance (either single life or joint life second death policies for inheritance tax purposes) but also buildings and contents insurance.
Investment services
We do not provide investment advice or investment services in-house as we consider these to be specialist services requiring the expertise of independent financial advisers and fund managers. However, we have forged strong relationships with a number of financial advisers, stockbrokers and fund managers in the North Devon region and beyond and are happy to introduce you to them to provide the investment advice you require.
