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Inheritance Tax and Estate Planning

Inheritance Tax (IHT) is based on the value of your estate when you die. This may include the value of assets you have given away or put into trust during the previous seven years. Careful planning can reduce or even eliminate the IHT payable. The complexity of IHT law provides substantial planning opportunities.

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Inheritance Tax and Estate Planning

  • Focus first on your objectives – don’t let reducing IHT overrule common sense, or your wish to take into account the financial needs of different family members and other potential beneficiaries.
  • Keep your planning as simple as possible. Bear in mind that tax law – or your personal circumstances – can change, and complex schemes may be difficult and expensive to unravel.
  • If you can afford it, look for opportunities to reduce the value of your estate – but don’t give away more than you can afford to. Once assets have been given away, they may be gone forever. For example, your children may decide that they do not want to support you in your old age, or themselves lose control of assets in a divorce.
  • Early planning offers the greatest opportunities. The sooner you can give away assets, the more likely you will survive the gift by at least seven years.
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  • Even late planning is better than nothing – for example, ensuring that you have used up your annual gift allowances.
  • Don’t take risks you cannot afford. For example, investing in AIM shares might be a useful way of reducing likely IHT – but could also expose you to the risk of substantial falls in the value of the shares. A mix of different strategies may be an effective way of protecting against such risks.
  • Ensure that you take into account the full tax picture. For example, disposing of assets during your lifetime may give rise to a Capital Gains Tax (CGT) charge that offsets or even outweighs any likely IHT saving.
  • Consider the long-term view. Assets that your beneficiaries will receive may in turn form part of their estates when they die – and be liable to IHT then. Skipping a generation (i.e. giving gifts to your grandchildren rather than your children) may be an option for overcoming this.
  • Aptus Wealth has a wide range of expertise and will invest considerable time to fully understand your objectives and personal circumstances to help you develop an IHT plan tailored to your particular needs

Protection Planning

Protection Planning is often greatly misunderstood. Many people instantly think of mortgage protection, life assurance, income protection or critical illness cover, but it’s how these products relate to your situation that matters the most. The main purpose of having suitable protection in place is to safeguard your future and your loved ones, should the worst happen. This involves understanding your personal and business circumstances, and the potential impact of unexpected life changes.

At Aptus Wealth, Protection Planning is not just about offering you a product, it’s about preparing for the unforeseeable. Unfortunately, none of us will escape death, and many of us could face a serious illness or a major lifestyle change in the future, such as divorce, fluctuating wealth due to losing a job, or a big business loss. By being fully prepared and protected in advance, you will greatly reduce the impact of such traumas on you, your family and your business.

When it comes to effective Protection Planning, we will provide you with a clear pathway using a robust financial planning framework. This minimises the impact of unexpected events on both you and those around you. This may involve a product or simply restructuring the protection you already have in place, but most importantly of all, you will gain a full understanding of any risks that may affect you in the future.

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