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We are authorised and regulated by the Financial Conduct Authority.

Inheritance Tax and Estate Planning

Inheritance Tax is a tax on the estate of someone who has died, and how much is paid, depends on the value of that estate.

Importantly, there is normally no tax to pay if either the value of the estate is below £325,000 or if the estate is left to a surviving spouse, civil partner, a charity or a community amateur sports club. If neither of the above applies, the estate will be taxed at 40% on anything above the £325,000.

An additional allowance of £175,000, something called the ‘residence nil rate band’, is available if a main residence is left to direct descendants including children and grandchildren. However, this allowance decreases by £1 for every £2 where the value of the estate exceeds £2 million.

Inheritance Tax Mitigation

Inheritance Tax Mitigation

  • Money given away before you die is still usually counted as part of your estate unless you live for a further seven years.
  • You can give £3,000 away each tax year inheritance tax-free.
  • Gifts to charities and political parties are inheritance tax-free.
  • You can give £250 each year to everyone you know.
  • You can give away money from income without having to pay tax (as long as it doesn’t diminish your lifestyle).
  • Wedding gifts (up to a limit) are tax-free.
Things to think about

Things to think about...

  • The earlier you find out about a potential inheritance tax liability, the better it will be to plan how to pass on your assets.
  • When making a gift, it must be genuine and unconditional that you will not gain from. The biggest asset for most people is their house but giving part or all of this to the children will not work if you continue to live in it.
  • Consider switching your ISA investments to AIM-quoted companies and holding them for at least two years before death.
  • Don’t be the richest person in the graveyard when you could be spending or giving away more now.

How we work

We keep it straightforward and simple.

1  

Arrange a Lifestyle Planning Meeting

A meeting at our expense to identify where you are now, how you got to where you are now, and where you’re trying to get to in the next 5, 10 and 20 years and so on for the rest of your life; in other words, a Lifestyle Plan.

     
2  

Arrange a Financial Planning Meeting

Another meeting, again at our expense, to identify all the resources available to you now, resources that will become available in future, and most importantly resources that might have to become available to satisfy the needs of your Lifestyle Plan.

     
3  

Arrange an Implementation Meeting of your Financial Plan

If, and only if, your Financial Plan indicates that that your needs would be best served by a financial or investment product and service, it is at this point that a recommendation will be made, again at our expense. If you are happy to go ahead in full knowledge of the facts and the fees involved, we can then start to implement your Financial Plan. If you want to walk away at this point, no problem; we wish you well and it won’t have cost you anything.

     
4  

Arrange an Annual Forward Planning Meeting

Now on board as a Sutherland IFA fee-paying client, an annual meeting is held to make sure that your Lifestyle Plan and your Financial Plan are on track to meet your financial goals and objectives.

Let’s start a conversation

We welcome the opportunity to learn more about how we can help you. Schedule a free no-obligation consultation, you might be surprised!