For more than 30 years the Blacktower Group has helped its select and loyal client-list protect, preserve and grow their wealth, paying close attention to their circumstances and needs in order to help them define and meet their objectives.

Inheritance tax planning forms a core part of this aim. In fact, our pre- and post- retirement planning wealth management services are often as much about protecting the client’s needs in the present as they are about providing for the client’s family after their passing.

Inheritance Tax – plan early to play the long game

As with all other aspects of wealth management, when it comes to inheritance tax planning, the earlier you consider your situation and goals, the sooner you can develop a strategy and start building for the long-term. Begin early enough and you may, depending on your situation, be able to significantly reduce your inheritance tax bill. In some cases you may even be able to mitigate your liability completely or structure it in such a way as to make it easier for your beneficiaries to manage.

Inheritance Tax liability

Every person in the UK is liable for inheritance tax (IHT) if their estate exceeds the limit of the nil-rate threshold. Items that add to an estate’s value include real estate property, art, cars, investments, savings and jewellery – this includes anything that has been passed on through the family and is of considerable sentimental value; IHT law allows no room for sentiment.

Exemptions for spouses and civil partners

The nil-rate band does not apply to spouses and civil partners as they are exempt from paying inheritance tax on the estates of their significant others. This is also true of other qualifying beneficiaries – for example, any charities which stand to benefit from your legacy planning.

Furthermore, if you choose to leave 10% or more of your estate to charity, this may help to reduce the percentage of your estate which is owed in inheritance tax.

The residence nil-rate band

The residence nil-rate band may apply to anyone who is leaving a family home to biological children, adopted children, foster children, stepchildren or grandchildren. The residence nil-rate band is being phased in gradually, so the threshold is being raised as follows:

  • £100,000 for tax year 2017/18
  • £125,000 for tax year 2018/19
  • £150,000 for tax year 2019/20
  • £175,000 for tax year 2020/21

The nil-rate band will then increase in line with the Consumer Prices Index (CPI) from 2021 onwards.

Mitigating liability

Inheritance tax is a complex issue and it is essential that any efforts to reduce or mitigate its effects are fully in line with the law.

Any person with assets above the nil-rate band threshold, particularly high net worth individuals, should consider their options.

There are numerous steps that can be taken to reduce or mitigate inheritance tax. These include the following:

  • Life insurance arrangements
  • Lifetime gifts for transfer of assets
  • Business Relief
  • Creating a trust
  • Will planning
  • Pension planning

Blacktower UK – inheritance planning

Clients of Blacktower UK benefit from the fact that inheritance planning forms a key part of our pre- and post- retirement planning wealth management services. If you are an existing client and would like an update or review of your circumstances, contact us today.

If you are not yet a client of Blacktower but have considerable wealth to investor or protect and have received a recommendation of our services, contact us for a preliminary discussion.

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