10 steps to avoid being hit with 40% IHT in 2018
By International Adviser, 11 Jan 18
With inheritance tax payments hitting a record high at the end of 2017, the new year is a good time for advisers to ensure that clients are being as tax efficient as possible when passing on wealth to future generations, law firm Collyer Bristow has advised.
Make sure cash is accessible
Having an emergency pot of cash for families to fall back on after death is important. It can help in the short and medium term by, for example, enabling spouses or children to settle outstanding bills.
Investigate the possibilities of Business Property Relief
Business Property Relief (BPR) is available on family businesses as well as that company’s land, property or equipment. However, it is also available on unquoted shares generally – meaning that investments in many AIM or EIS (Enterprise Investment Scheme) shares may qualify for 100% relief.
Collyer Bristow points out that investments in AIM shares or EIS should only be made for sound investment reasons rather than for tax purposes.
However, for those with the right experience and risk appetite, this could be a way to drive investment portfolio returns as well as reducing IHT.
Louise Jones, associate at Collyer Bristow LLP, says: “A simple annual check-up can make a huge difference to how much wealth can be passed on to loved ones.
“The new year can be a good time to re-evaluate your position and identify any sensible tax planning steps that could be be taken. A pro-active, forward-thinking approach is key.
“Identifying opportunities to trim your assets down is really important.
“A review also allows you to consider how much of your exemptions you have used up – and how much more you have to go before the end of the financial year in April.”
Tags: IHT
