Inheritance Tax Planning in Nottingham
What is Inheritance Planning?
Death and taxes can’t be avoided but we can help you to help your nearest and dearest when the inevitable comes.
Inheritance or estate planning is all about planning for the future to look after your family and friends after you have gone: it is about growing and organising your wealth for their benefit when you die.
Inheritance planning can be done during your life to help set things up efficiently at the time of your death. If you do this, very little work on tax planning will have to be done after your death, but it is also possible to help reduce a person’s tax liability after they have died.
4 ways to Manage your Inheritance Tax Bill
Reducing your inheritance tax isn’t as simple as just giving your estate away before you die. Any money gifted usually counts as part of your estate and may be taxed, if you die within 7 years of making the gift. Therefore, it’s important to plan how you want to pass on your wealth early.
If you think you may have to pay inheritance tax, here are some ways you can reduce it:
- Leave money to charity
- Give away up to £3,000 a year in gifts
- Make regular gifts out of excess income
- Hold onto money in your pension
Benefits of Inheritance Tax Planning
What are the Benefits of Inheritance Tax Planning?
Understand the value of your estate better
Financial planning should help you understand the value of your estate and how this might change in the future. Taking a look at what assets you have to leave behind for loved ones and considering how they’d be distributed can help with this. Cashflow modelling can show you how wealth and assets will be depleted over time. This can help give you an understanding of the inheritance that you can leave or where you may want to make lifestyle changes in light of this.
Minimise potential Inheritance Tax
Is your estate likely to be liable for Inheritance Tax (IHT)? If the total value of all your assets exceeds £325,000 IHT may be due, reducing the amount loved ones will receive from your estate. However, there are often things you can do to reduce or eliminate an IHT bill. However, this requires a proactive approach and you should take steps to do so as soon as possible. From setting up a trust for some assets to gifting to charity, an effective estate plan can mean leaving more behind for loved ones.
Calculate the sustainability of your income
You might have a clear idea of what you’d like to leave behind for family and friends. If so, how does this correlate with the income you’re already taking or plan to take? Estate planning can help you reconcile your income with legacy plans. It’s also an opportunity to assess how sustainable your income is over the long term. If your expenditure remains the same, how much would you leave behind if you lived ten years beyond the average life expectancy, for example?
Help loved ones plan for the future
Whilst it can be difficult to talk about your estate plan, it can help loved ones prepare for the future. Letting beneficiaries know how much they can expect to receive through inheritance can improve their personal financial security. Without a discussion, they could make inaccurate assumptions that affect them long term. It’s a step that can give you peace of mind about their future too.
How can Seagrave French help you?
How can Seagrave French help you?
“Avoid paying tax again on wealth you’ve accumulated and been taxed on already!”
Tailored wealth succession planning enables a smooth transition to the next generation as well as minimising tax liabilities.
We can advise…
- Individuals whose estate planning is close to the nil-rate band or many times larger
- Techniques to mitigate inheritance tax on family homes, family businesses and investment portfolios
- On both lifetime transfers and wills
However, estate planning is not solely about tax and we adopt a common-sense approach, helping you to ensure your own financial needs are met and to avoid “giving away too much too soon”.
Whatever your ambitions, we will commit to them wholeheartedly and deliver the premium service you deserve. Get in touch today to book a chat with the experts at Seagrave French.