Inheritance Tax Planning

Inheritance Gifting

Some money and assets that are paid into another person’s account are exempt from inheritance tax. Seeking professional advice about what is considered an inheritance tax free gift is vital to make the most of your estate’s value.

• The annual exemption for gifts is £3000, and exemptions unused one year can be carried over to the following year, but not after that period.
• The small gifts exemption also allows you to give up to a £250 gift annually to any number of people, though not the beneficiaries of the £3,000 annual exemption.
• Gifts from after-tax income may also be exempt, if it can be shown that the giver can maintain their standard of living despite the gift.

Seeking specialist advice can help you plan a strategy for gifting part of your estate and make a big difference to your IHT liability. Talk to Approachable Finance today and avoid a larger than necessary tax bill on your estate.

Whole of Life Cover

You can insure against paying some or all Inheritance Tax by taking out the right kind of life cover. A “Whole of Life” policy can be set up specifically to be held in trust. This means that the premiums will be paid into the trust, and upon the policy holder’s death the trust will pay part or the entire inheritance tax bill.

It’s all too common that life insurance policies are not written ‘in trust’ and bereaved families end up having to pay large IHT bills. Talking to Approachable Finance can help put an Inheritance tax planning strategy in place that means your family don’t miss out on their rightful inheritance.

Trusts

Putting money or property in a trust can be an effective way of limiting IHT liability. When you set up a trust, a legal arrangement is made to put some of your cash, property and investments in the hands of another person, usually a solicitor or family member, for the benefit of a third person. As you are no longer the legal owner of assets in a trust, they won’t normally be included in the calculation of your inheritance tax bill

There are a number of different trusts available to UK residents, each with different rules on IHT, Income and Capital Gains tax. Setting up trusts can be a complicated process. Talking to a financial advisor at Approachable Finance ensures that you make the right choices to maximise what you leave behind.