Effective Inheritance Tax planning can help protect you and your family from this unwanted tax burden, but with expert advice it may be possible to mitigate its impact.
Inheritance Tax (IHT)
Initially established to create a more economically even society, Inheritance Tax (IHT) laws were introduced to stop the accumulation of wealth over generations and redistribute it on behalf of the general public and the state.
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Effective Inheritance Tax planning
(IHT) Inheritance Tax affects many people and can be a complex area of taxation requiring constant review. Planning for the future as early as possible is essential to minimise any potential IHT liability.
Effective IHT planning can help protect you and your family from this unwanted tax burden but with expert advice it may be possible to mitigate its impact. At WR Partners we have the knowledge and experience to deliver tax efficient solutions as part of an overall planning strategy including:
- Fully utilising IHT exemptions and reliefs
- Tax efficient use of Wills
- Benefits of using trusts
- IHT Agricultural and Business Relief reviews
- Use and structuring of Family Investment Companies (FICs)
Inheritance Tax rates and exemptions
The standard Inheritance Tax rate is charged at 40% on the part of your estate above your nil rate band, currently £325,000, although gifts between spouses or civil partners will be exempt. Where an individual is a homeowner there is an additional Residence Nil Rate Band available up to a maximum of £175,000. This can be restricted depending upon personal circumstances.
There are additional IHT exemptions and reliefs available, most notably Agricultural Relief and Business Relief which can be available at 100% or 50% on agricultural or business assets. This is a particularly complex area of legislation, and it is important to review the nature of these assets and the structure of your business to ensure they are maintained.
Family Investment Companies
A Family Investment Company (FIC) is simply a company that has been established with the purpose of holding investments – whether that is stocks and shares, rental property, or another form of investment.
The rights and interests of the different shareholdings will be determined upon setting up the company so that they meet the founder’s specific needs. The structuring of a FIC can be done in different ways and creates a bespoke vehicle which can be used in a similar way to a family trust and usually allows the founders to retain control and involvement of the company whilst passing on wealth to future generations.
How we can help
If you and your family need support with inheritance tax planning, Get in touch with our expert tax team to see how we can help.
Get in Touch
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