Estate and Inheritance Tax Planning
Estate and tax planning is a complex area. Making sure you have control over when and to whom your wealth is passed on to in the most tax efficient way is a key part of your overall planning.
Efficiently securing your wealth for future generations
After careful financial planning, there comes a point where many start to think about passing assets efficiently to the next generation. Protecting your estate is ultimately about securing more of your wealth for your loved ones and planning for what will happen after your death.
If you are concerned about inheritance tax and the effect it will have on your wealth, and the assets you will pass on to your relatives, you should speak to your Adviser about Estate Planning.
At Westminster Wealth Management we will assess your personal situation and set up a bespoke plan. Estate and tax planning is a complex area. Making sure you have control over when and to whom your wealth is passed on to in the most tax efficient way is a key part of your overall planning.
Key points
As no one knows what the future might hold, or how much money you could need in the future, making gifts can be an effective way of reducing IHT liabilities. Anyone who makes a gift must accept that they lose ownership and control of what was once part of their estate.
Gifts made within seven years of death will be subject to Taper Relief (a shrinking rate of tax applied) if over the Nil Rate Band. Over seven years and the gift is free from inheritance tax. Seven years can be a long time to wait for IHT exemption, especially if you are elderly or in poor health.
It’s worth keeping records of any gifts you make during your lifetime in order to make the estate process easier for your family.
Minimise the burden your family may face
Understanding gifting - Inheritance tax free gifts
Any gifts between spouses or civil partners are free from IHT. HMRC also gives you an annual gifting allowance of £3,000 every year. This is called the ‘annual exemption’. If you don’t use your full £3,000 annual exemption in one year, you can ‘carry over’ the remainder and use it the following year. However, you can only use this carry-over for one year.
You can also make small gifts (up to £250) to as many different people as you like. Wedding gifts are also free from IHT. You can make a wedding gift of up to £5,000 for your child, up to £2,500 for your grandchild or up to £1,000 to anyone else. IHT will not be paid on gifts made to charities, national museums, universities, the National Trust, and certain other institutions.
The Financial Conduct Authority does not regulate tax advice or estate planning.
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