Tax-Efficient Will

Once your legacy planning is complete, it needs to be underpinned by a comprehensive Will..

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We create for you your own Resource Optimisation Program (ROP) which aims to tax-optimise your family’s assets at outset, ongoing, and when you die

Our Chartered Tax Advisors aim to maximise usage of every legal tax allowance, benefit and exemption

Your Will is your declaration of how you want your assets to be managed or distributed when you die

So, how can your Will be tax-efficient ?

Death is usually the very last opportunity HMRC gets to tax you and it’s an opportunity they’re not going to miss

Every person currently has a nil rate band of £325,000 for Inheritance Tax (IHT) purposes. Married couples, or those in civil partnerships, each have a nil rate band, so £650,000 in total

In addition, upon death, both partners or spouses have a main-residence nil rate band of up to £175,000 each, and it’s transferable between them

If your total assets are worth less, there’s no IHT to pay. Anything in excess, is taxed at 40%

So, do the numbers for your estate as, without planning, you’re likely leaving a sizeable legacy to the taxman. If that’s deliberate, that’s your choice, but oftentimes it’s not..

Let’s get our creative pants on..

You don’t have to die to use your nil-rate-band. You can use it right now, today. Gift, say, £650,000 into a Relevant Property Trust, survive 7 years and the entire amount is outside of your estate

Then in 7 years, you do it all over again, and again, and again – assuming you live long enough

Actually, you can probably gift a little more by using your annual exemptions for this year and last year

Simple planning which may save your family £279,200 every seven years

More exemptions

Under the heading of ‘close to useless exemptions’ are small gifts of £250, wedding gifts of up to £5,000

Potentially much more useful is ‘normal expenditure out of income’. It needs thought and planning and typically falls beyond the remit of bread and butter IHT planners. Rest assured, this topic has huge potential and it’ll be one of the areas we will focus on with you..

Other assets can pass tax-free at death too

Likely you can have a Self-Invested Personal Pension (SIPP) or a Small Self-Administered Scheme (SSAS) fund, which may pass tax-free on death

More interestingly, the entire value of a Qualifying Non-UK Pension Scheme (QNUPS) may be outside of IHT and the only limit is the amount of the contribution which must be ‘reasonable’

Life insurance and Death in Service benefits, when properly written in trust, are outside of the estate for IHT

Business Relief of up to 100% applies to shares in qualifying businesses, usually meaning trading companies

Up to 100% Agricultural Property Relief may be available to farmers

Without wishing to get technical, investments in Enterprise Investment Schemes, Venture Capital Trusts and those where Business Relief is available, are outside the scope of IHT

What our clients say

In almost twenty years of working for us they have acted with honesty and integrity as one of our trusted advisers. We are always treated as important and nothing is too much trouble

John Reilly, Managing Director

John Reilly (Civil Engineering) Ltd