Your future

Inheritance Tax Planning

We're spending the Kid's Inheritance reminds us of a car sticker. In reality it's often a combination between spending to enjoy our lives but also wanting to leave behind something for our family to enjoy theirs too.

Gifting patterns are changing, with assets being passed across before death. After all, why not see your family share wealth while alive to see it, giving is better than receiving.

There are many reliable trusts that can facilitate a tax efficient gifting process. These vary from receiving a part but immediate discount on your estate value (discounted gift trust) to longer term efficient gift trusts. In recent years, we have seen the Government encourage investment into smaller shares on the Alternative Investment Market (AIM) and investing into qualifying shares can provide an exemption after just two years. The same time period applies for Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCT), but always remember that investing in these situations scenarios can be very high risk. Little point if you get valuable reliefs on an investment that ultimately is decimated in value, possibly worthless.

What should be said about Inheritance Tax planning is that it is a very individual subject and we take great care to ensure all matters are considered. With the rise in property values, particularly in the South East of England there are very good reasons to talk and take steps to avoid what is a double-taxation whammy affecting many families. The proposed increases that will be phased in to potentially protect £1 million of assets from 2020 are welcomed, but there is still a job to be done.

Back to gifting, careful thought needs to be given to the gifting process utilising various exemptions, such as the £3,000 annual gift exemption. However, little is generally known of the gifts from 'income' that can be used. In simple terms you can give money away regularly from income that leaves you enough income not to affect your lifestyle.

‘Lots to consider and Future Life Capital look forward to guiding you in this important planning area’.

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Future Life Capital is a trading style of
Flamingo Capital Limited. © 2018