Planning for future generations
24th August, 2021
As a high-net-worth individual, planning finances for your future generations can often be quite challenging. Nobody likes to think of a time when they are not around but planning what happens to your estate isn’t just about passing on money when you die – it’s also about being able to enjoy life and making sure you have enough money to live.
Without proper planning, a substantial portion of your estate could end up in the hands of HMRC rather than your chosen inheritors. This is why it’s so important to start planning early! Plan for future generations today with Haggards Crowther.
What is Inheritance Tax Planning?
We know that Inheritance Tax planning (IHT) is a huge consideration, and most people put it off for several reasons. Often, it’s an emotional subject and there is so much advice that it’s hard to know where to start. Many people put it off because it’s not a priority –- but whatever the reason, it’s important to start thinking about it as early as possible.
What is Included?
In the simplest form, IHT is payable on everything you have of value when you die. Here are a few things you may include:
- Your home
- Savings and investments
- Jewellery, works of art and cars
- Any other properties or land – even if they are overseas
Key Aspects of Inheritance Tax Planning
At Haggards Crowther, we focus on several areas when assisting our clients with inheritance tax planning. The strategies that we provide are well-designed to help minimise your estate’s liability.
- Gifts
- Trusts
- Pensions
- Life Assurance
- Setting up a Family Investment Company
- Specialist Investments carrying IHT-exempt status
- Utilising a non-UK domicile status
Why Is Inheritance Tax Important?
Without a well-structured plan in place, inheritance tax can impact the wealth you are looking to pass down to your loved ones. High-net-worth individuals often only assume that they are affected by IHT but due to factors like inflation, more properties are becoming eligible to be taxed.
When Do I Pay Inheritance Tax?
If you are a high net worth individual who is looking to plan your finances for your future generations it is important to remember that inheritance tax must be paid.
To help improve the process of paying inheritance tax, the team at Haggards Crowther provides efficient financial support such as spreading payments in installments.
Factors to Consider with Inheritance Tax Planning
- Are you making the best use of annual and other IHT allowances?
- Why you should have a Will in place, whatever your status – the Will is central to UK Inheritance Tax planning!
- Can you give away any surplus annual income? And why you should evidence such gifts
- What options are available in passing ownership of your family home either to relatives or to your children?
- The impact of a marriage, a birth in the family or a divorce
- Misconceptions about IHT charged on your gifts, especially those lifetime gifts made to adult and minor children
- The role of your favoured charity
- The 7-year IHT rule, and the impact of making successive gifts
- The tax implications of trusts, including bare trusts, life interest trusts and discretionary trusts
- Deceased spouse’s unused lifetime allowances
- The impact of Capital Gains Tax on IHT planning and ensuring allowances and reliefs are used.
As with all tax planning matters, the earlier you discuss options with us, the more we can do to help. Every year that passes, you lose access to annual allowances!
Simply contact Terry Smith or Faizan Sarwar on 020 7384 0920 to see how we can work together to get your tax affairs in order for your loved ones.
Trusts and Inheritance Tax
If you are unsure what a trust is, a trust is a legal agreement that occurs when your asset is held by a trustee of a group of trustees. It is important to understand when taking this approach, once the asset is transferred to the trustee it no longer belongs to you. This can have a huge impact on the inheritance tax liability for the people you are gifting the asset to.
Another way of utilising a trust is by giving money that you are looking to pass down to future generations. Once this money is in a trust, you can control when the money is paid out, making sure your finances are planned out for when you die.
Moving your assets or money into a trust is a big decision, which is why seeking the support we provide at Haggards Crowther is essential. We can guide you along the way, making sure you make a decision that best suits you.
Planning your Future with Haggards Crowther
At Haggards Crowther, we are a family-owned firm of Chartered accountants and tax advisers. We understand that every client has their own circumstances when it comes to inheritance tax planning, which is why we will closely work with you to ensure you get the support you need.
With years of experience providing expert accountancy and tax advice, our team is always well-prepared to provide essential support to all of our clients, no matter the circumstances. We are always up to date with the latest tax changes in the UK, meaning that you can always benefit from our strategies.
Terry started life at HM Revenue and Customs before moving to Ashdens and then on to BDO and Chantrey Vellacott, the combination of which has provided Terry with a wide breadth of experience which has proved invaluable when helping a broad range of clients with their tax affairs.
Whether it involves meticulously organising a client’s tax affairs or leveraging his expertise to mitigate their tax exposure, Terry has a passion for delivering tangible results.
