Keeping It In The Family…
Give your family the best chance at preserving wealth from one generation to the next, advises Alastair Brown of Raymond James
As gloomy as it might sound, death and taxes are often described as the only two certainties in life, and inheritance tax (IHT) means they can turn up at the same time.
*Almost £5.4 billion was paid in inheritance tax in 2018/19 – a record high.
With people living longer and enjoying more active lives in retirement, the age at which the next generation will eventually benefit and how tax efficiently the wealth is transferred can be a real headache. Whether your motivation is to support your relatives, protect vulnerable family members or to leave a legacy, passing on your wealth is a highly emotive and potentially complicated topic.
Ensuring the tax man isn’t your largest beneficiary
What is Inheritance Tax (IHT)? Will you have an IHT liability? Can you reduce it? What can you give away in your lifetime? More and more people are likely to be impacted by Inheritance Tax. However, paying Inheritance Tax doesn’t have to be inevitable. In many cases this most unpopular of taxes can be minimised using allowances or exemptions, or potentially be avoided altogether with careful planning.
How, when and to whom should I transfer my wealth?
When is the best time to give money away? If you have children should they be treated equally? Who do you leave your money to if you have no immediate family? Will your partner automatically inherit your wealth if you have no legal partnership? Deciding who should inherit and how best to transfer your wealth is rarely simple. Family dynamics are often highly complicated. You and your spouse or civil partner might have different views on how, or even if, any of your respective relatives should inherit your wealth. Whatever your goals, getting financial advice will help you pass on your money in a way, and at a time, that creates maximum benefit for the people that matter to you most.
Getting all your affairs in order, from deciding who should inherit your wealth to making provisions for vulnerable family members, can be an extensive but invaluable process. Known as Estate Planning, it ensures you eliminate uncertainty over the administration of your assets and aims to maximise the value of your estate by reducing or eliminating taxes and other expenses. From setting up trusts to mitigating Inheritance Tax, Estate Planning should also consider your needs in later life, including the potential cost of long-term care.
Could we help save you and your loved ones thousands?
Ready to have a conversation? Give us a call and we’ll help you understand whether IHT is likely to impact you, and whether you could take action to reduce it. If it looks like we can help you keep more money in the family, we’ll book your free, no obligation initial consultation with one of our in-house specialists.
*Source: https://www.statista.com/statistics/284325/united-kingdom-hmrc-tax-receipts-inheritance-tax/Published by D. Clark, Apr 29, 2021
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