Inheritance Tax and estate planning
Our advisers can help you navigate the UK’s complicated and changing tax regulations, so that those who benefit from an inheritance will only pay the necessary amount of tax.
The importance of planning
Inheritance Tax (IHT) doesn’t just affect the very wealthy. We are living and working longer which means we may accumulate more assets. Property has also gone up in value, which could push your estate (the money and other assets you leave behind) into IHT territory. In fact, 2022-23 was a record-breaking year for IHT receipts, with £7.1billion paid to HMRC.
There are several ways to reduce, or even eliminate, the amount of Inheritance Tax that is paid when you die. However, few are completely straightforward, and a well-written will and good planning is essential. Often a tailored combination of the various tools available is more beneficial than any single solution.
Our advisers help people at all stages in life to prepare for the future in a way that makes the most of their money now, while ensuring that it will benefit the people and causes dearest to them.
Using trusts
Trusts can be separate from your estate, so inheritors don’t need to pay Inheritance Tax (IHT) on them. However, they are highly complex and need careful planning.Giving it away
Some forms of gifting are exempt from IHT, and others can be if you survive seven years after making them. Again, this is a complex area that is easy to get wrong.Taking out insurance
You can take out a policy that provides a payout upon your death that may cover the potential IHT bill.Business relief
Certain investments will qualify for this relief, but they are classed as high-risk products by our regulator, so it’s important to take professional advice on this form of investing.Careful pension planning
Currently, most pensions fall outside your estate and are exempt from IHT. However, this needs to be managed alongside your pension planning.Gifting to charity
If you leave 10% or more of your assets to a registered charity, you can potentially reduce IHT payable from 40% to 36%, but this won’t be appropriate for everyone.Book your free initial chat
Ready to start planning for a brighter financial future? Book now for a free, no-obligation chat with one of our independent financial advisers.
book nowWhy choose us?
Our clients explain why they trust Flying Colours for financial advice, and why they’ve continued to work with us over the years.
