Is your wealth giving you a headache?
Are you concerned that the taxman stands to take a significant chunk of your estate when you die? Or, are you worried that your children from a previous relationship may not receive their rightful legacy if you are on your second or third marriage?
Estate planning is one of those areas that none of us like to think about and can be one of those jobs that keeps getting put off.
Although the tax situation is improving with the introduction of the additional nil-rate band for property owners. It still nevertheless means that estates valued at over £1 million (couples) will suffer tax on the excess at 40%. In fact for estates valued in excess of £2 million the additional nil-rate band will be reduced by £1 for every £2 that the estate value exceeds this threshold. Estates valued at over £2.35 million will therefore lose the additional allowance completely.
Ultimately the only effective way to reduce your potential liability is by reducing the value of your estate. One of the best ways to do this is by making gifts whilst you’re still alive, not only can this be effective in mitigating the IHT bill but you’ll also get the pleasure of seeing your beneficiaries enjoying the gift.
Simple steps to reducing the value of your estate include making gifts to charity, utilising your annual allowance of £3,000 each tax year, and gifting excess income.
However, if your estate is of significant value or your family situation is particularly complex, then you may well benefit from taking professional advice.
As a first step we would strongly recommend that you update your Will. If you don’t have a family solicitor we work with several we would be happy to recommend.
If you’re of a philanthropic nature perhaps setting up a family or charitable trust is something to consider.
Don’t let your wealth continue to cause you a headache, get in touch with us today and take the first steps to organising your affairs.