Inheritance tax (IHT) is not only a tax on assets held at death, but also applies to gifts made by individuals within seven years of death and transfers into most trusts. IHT is becoming a significant burden, as the value of the family home alone will bring many individuals into the regime.
This is an area of tax that can be extremely complicated. However, with effective planning you may be able to mitigate your potential liability completely. The use of trusts is still a popular and effective tool, common to many IHT planning ideas.
A trust is a legal arrangement whereby assets are placed into the 'trust' of a nominated trustee, for the benefit of one or more 'beneficiaries'. Provided that you cannot benefit from the trust or continue to use the assets, the assets will no longer be included within your estate.
It is also important to ensure that you have an up to date Will in place. Should you die without leaving a valid Will, your estate will be distributed in accordance with the rules of intestacy - these may not be what you might think! A properly drafted Will can have many benefits, not least control over the future ownership of your assets.
If you would like to discuss any of these ideas in more detail, please get in touch with one of our experts who will be happy to discuss your circumstances with you.
There are many tax rules that can affect you personally and therefore which will have an impact on your personal wealth. Grant Thornton can help with minimising any potential inheritance tax liabilities. For further information please click here or contact us on firstname.lastname@example.org.