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Vizion Wealth Chartered IFA Milton Keynes Inheritance Tax Planning

Inheritance Tax & Trusts

Inheritance tax no longer affects only the wealthy, with rising property prices many families with modest assets and investments may now be potentially liable to inheritance taxation at 40% on a portion of their assets at death and in turn significantly reducing the value of the estate passed to beneficiaries.

Vizion Wealth approaches Inheritance Tax (IHT) Planning as part of a wider holistic financial plan which typically evolves over time. Understanding and considering your own long term retirement and lifestyle goals is key before making provision for loved ones and implementing an inheritance tax planning strategy to reduce the potential liability to HMRC and increase the legacy passed to your chosen beneficiaries.

Effective inheritance tax planning incorporates a wide range of strategies including drafting your will and power of attorneys correctly, utilising gifting exemptions and the use of trust, insurance and inheritance tax exempt structures to reduce your liability.

Peace of Mind

Making sure that you’ve made plans for after you’re gone will give you peace of mind. You don’t have to be wealthy for your estate to be liable for Inheritance Tax, and it isn’t something that is paid only on death, as it may also have to be paid on gifts made during someone’s lifetime. The rate of Inheritance Tax on death is 40% and on chargeable lifetime transfers at 20%.

Your estate will be liable if it is valued over the current Inheritance Tax threshold on your death. The Inheritance Tax threshold, or nil rate band, is currently at £325,000 (2017/18) for each person. This amount has been frozen at £325,000 since 2009, and HM Revenue & Customs have confirmed that it will remain frozen at this level up to and including the 2020/21 tax year. There is no accounting for inflation, and therefore the effect of this freezing of the NRB is such that increasingly more estates may have an Inheritance Tax liability.

From 6th April 2017, a new main residence nil rate band has also been introduced where the main residence passes to direct descendants. This has started at £100,000 but will increase to £175,000 by April 2020.

As part of an inheritance tax planning meeting, we will typically consider:

  • Wills and structuring your estate
  • Utilising gifting exemptions
  • Reviewing suitable term, whole of life and gift inter vivos insurance policies to reduce or cover your Inheritance Taxation Liability

Consider various types of trusts to meet your needs

This can incorporate discounted gift trusts, wealth preservation trusts or loan trusts to provide an element of access to capital or income during your life. Other options include family discretionary trusts and bare trusts to remove capital from your estate while still providing an element of control and management.

Alternative IHT exemption strategies

These may utilise business property or agricultural property relief and may incorporate tried and tested schemes such as Enterprise Investment Schemes, IHT or AIM portfolios.

With Inheritance Taxation being such a complicated area seeking professional independent advice from an estate planning specialist at Vizion Wealth will ensure implementation of a robust, effective and bespoke inheritance tax planning strategy to preserve your family wealth in the future.

Vizion Wealth Chartered IFA Milton Keynes VouchedFor

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For an initial chat with an expert about your personal or business financial planning needs, please feel free to call us on 01908 920043 or e-mail us at info@vizionwealth.co.uk


Vizion Wealth LLP, 16 London House, Swinfen’s Yard, High Street, Stony Stratford, Milton Keynes, MK11 1SY. Registered in England number: OC367088.
Telephone: 01908 920043. Vizion Wealth LLP is a Limited Liability Partnership. Vizion Wealth LLP is authorised and regulated by the Financial Conduct Authority.

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