Inheritance Planning

Inheritance tax (IHT) is a serious concern for an ever-growing number of people.

There are many methods of reducing a potential IHT liability but most of these rely upon individuals having sufficient resources to make lifetime gifts of their assets.  Unfortunately, many people can't consider making significant gifts because they either cannot afford to or are unwilling to lose access and control over their funds.

Married couples and registered civil partners can take advantage of the IHT spouse exemption, on first death, which allows assets to pass to the survivor free from IHT.  Whilst this exemption can avoid IHT on the first death, if all the deceased's assets simply pass to the survivor this can increase the eventual IHT liability on second death.  Inheritance tax is charged on assets over and above the Nil Rate Band which is available to every individual.  Any unused portion of the Nil Rate Band from the first death of a married couple or civil partners may be used to enhance the Nil Rate Band on the second death.

A person may leave assets up to the value of the IHT nil rate band to anyone they choose (e.g. children) free from IHT.  Certain gifts made in the seven years before death and specific bequests must also be included when determining the amount of available nil rate band on death.

There are arrangements which can allow individuals to make a lifetime IHT gift whilst still retaining control and access over the funds.  These can ensure that the nil rate band is not wasted on first death.

Charges introduced in the Budget 2006 may have serious implications on existing and new trust arrangements.  It is therefore essential that professional advice is taken before any arrangements are made.

 

 

 

 

 

 

 

 

Bausor Hall Financial Services Ltd (FSA Registration: 224098) is an appointed representative of Burns-Anderson PLC (FSA Registration: 126191), 27 Great George Street, Bristol, BS1 5QT which is authorised and regulated by the Financial Services Authority.

Some products and services may not be regulated by the FSA

Bausor Hall Financial Services Ltd is a company incorporated in Cardiff Registered No 4571385.  Registered Office 38-44 Binley Road, Coventry, CV3 1JA