Inheritance Tax and Estate Planning
This service is by referral.
Life insurance is an important tool in preserving the value of an estate, especially where assets are illiquid, held till death, or gifts of substantial value are made. Life insurance provides a simple and cost-effective solution and, when structured correctly, provides immediate liquidity to fund the IHT due, before probate is granted.
Inheritance Tax Planning with Life Insurance; Having accumulated wealth during your lifetime, you may be concerned about the inheritance tax that will be due on your estate when you pass away. At 40% on assets above the nil-rate band, however, the residence nil-rate band can increase your tax-free threshold if you leave your home to your children or grandchildren. The inheritance tax can significantly reduce the value of assets passed on to your loved ones.
Fortunately, there are ways to mitigate the impact of inheritance tax through careful financial planning. One strategy is to take out a life assurance policy and place it into trust for the benefits of your loved ones. The proceeds from the policy can provide funds to immediately cover any inheritance tax bill, without needing to sell other assets.
The sooner you start planning, the more options will be available to structure your affairs in a tax-efficient manner. So reach out to us for an initial discussion about how we can help minimise the inheritance tax on your estate. With the right life insurance policy in place, you can give your loved ones the maximum value from the assets you have built up over your lifetime.
Making sure your money ends up in the right hands by writing a will and using trusts
If any of the following areas are of concern, we can ensure a specialist helps you. We will advise you whether that specialist is part of Quilter Financial Planning or not (for example, will writing services are not provided by Quilter Financial Planning).
Why you need a will
Leaving a will is the only way you can be sure the right people will inherit your estate. Don’t assume all of your estate will automatically pass to your spouse. If you do not leave a will, intestacy laws, which vary between countries, will dictate who inherits your estate. This can take a long time to resolve.
Key considerations that influence the law’s decision on who inherits your estate if you don’t leave a will are:
- The value of your estate
- Whether you have children
- If you are married
Leaving a will ensures that children or dependents are looked after in accordance with your wishes.
Inheritance tax isn’t only for the rich. Your home is likely to be the biggest asset in your financial estate. As a result it can affect how much of your estate is passed on to your beneficiaries when you die. Inheritance tax is payable on death. Each year the UK Government reviews the tax rates payable, the reliefs available, the amounts over which it becomes payable, and how it treats gifts during your lifetime. It is important to plan each year and check that your estate will pass legally and ethically to your beneficiaries, without them having to pay a large tax bill.
Inheritance tax planning, estate planning, trusts, tax planning & will writing is not regulated by the Financial Conduct Authority.
Tax treatment varies according to individual circumstances and is subject to change.
Will writing is not part of the Quilter Financial Planning offering and is offered in our own right. Quilter Financial Planning accepts no responsibility for this aspect of our business.
