In recent years we have also seen growth in the popularity of investment solutions that use BPR as a means of planning for IHT . Such solutions allow individuals to plan for IHT whilst retaining control and access to their investment and provided that the BPR qualifying investments are held for 2 years prior to death , they enjoy 100 % relief from IHT . Seneca Partners offer a solution in this area via the Seneca IHT Portfolio Service .
What are some of the key issues to consider when planning for the future ?
Wealth management is usually first and foremost on people ’ s minds when they are planning for later life and looking to safeguard wealth for the next generation .
Advice will need to be taken on the best way to maximise the value of an estate when wealth is being transferred , such as looking at any business assets or dealing with complex financial matters .
What do I need to know about inheritance tax and how can I plan to properly minimise its effects ?
With the Government having announced that the standard Inheritance Tax ( IHT ) nil rate band , available to any individual , will remain at £ 325,000 until at least April 2019 and with the forthcoming additional residence nil rate band due to begin being phased in on April 6 2017 , IHT planning is once again back on the agenda .
But don ’ t forget that there are other important factors to take into account , from taking advice on a Will or dealing with estate planning . Dying without a Will can leave remaining family members in a difficult situation , with the law determining how an estate is distributed , rather than a person ’ s wishes .
Trusts can be a very valuable tool at this stage , too , for example ring-fencing assets for minors or vulnerable beneficiaries .
Technically , next of kin have no legal entitlement to deal with the affairs of a family member – only a legally appointed attorney or court appointed deputy can do so .
The cornerstone of IHT planning is to ensure that a tax efficient Will is in place . Ensuring that a Will is appropriately structured can have a very significant effect on the amount of IHT payable . Thereafter , IHT planning is largely about lifetime giving and IHT-friendly investing .
In terms of giving , there are a number of lifetime exemptions available , and subject to those , a lifetime gift made direct to an individual will be exempt from IHT providing the donor survives for seven years , though the rules are more complex when making gifts into trust .
Another useful strategy is to ensure that any life insurance cover , death in service benefits and pension funds are dealt with in a tax efficient way . The most flexible and IHT efficient way of dealing with life insurance and death in service benefits is to direct any payouts into a discretionary trust for the benefit of the deceased ’ s intended beneficiaries .
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