Benfits of our Inheritance tax (IHT) advice and wealth preservation service

There are a few strategies for inheritance tax, with one or 2 of them very simple to arrange which have a huge effect on reducing death duties. Giving money away to family and surviving 7 years is one of them, although this is not always viable for some of our younger clients.

I advised a client on IHT a few years ago, as I had calculated that her total estate (including her own residential property) was worth £1.5m, and even after her IHT tax free allowance of £325,000 was deducted from this in, the rest of the estate would leave a tax bill of £470,000 for her children if she were to pass away. Being of a relatively young age, gifting money to the children wasn’t appropriate for her, so I recommended and affected a whole of life insurance policy costing £4,000 per annum to pay out the amount of the tax due in the event of her death. Although this sounded like a lot of money at first, it worked out that even if these premiums increased moderately in future decades, and she survived another forty years, the payout from the policy on death would still eclipse the amounts paid in premiums THREE times over. There is also investment value in the policy to the tune of 35% of premiums paid so far, and the children will not be forced to sell the property just to pay the taxman.

Another solution we provided for a different client many years ago, was to convert £200,000 cash sitting on a bank account into an investment bond with what’s called a discounted gift trust built into the arrangement. This allowed the client to invest the money with her children as beneficiaries, allowing her to draw £10,000 per annum income for the rest of her life. Half of the £200,000 was immediately ring fenced away from her estate, with the other half falling out of the estate 7 years later.

We have other investment strategies that can get assets out of the estate after just 2 years, and can combine with investing in ISA's to provide maximum tax efficiency.

ENSURE THE CHANCELLOR DOESN'T POCKET A CHUNK OF YOUR ASSETS IN TAX WHEN YOU PASS AWAY

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Our location and registered address is 1a High Street, Bovingdon, Hertfordshire, HP3 0HG