Inheritance Tax Planning.

Our team of specialists can help by advising on tax issues relating to:

• Setting up and managing a lifetime trust
• Making lifetime gifts
• Employing the most tax-efficient way of structuring your finances
• Capital gains tax liabilities
• Inheritance tax
• Drafting a will
• Disposing of valuable assets such as shares or property

Everything will be unique to you because we know that everyone’s circumstances are different.

The team at Lanyon Bowdler is highly experienced in dealing with extremely complicated personal and financial affairs.

We can help you avoid the common pitfalls, which can so easily catch people out, assist in ensuring any tax liabilities are paid without interest or penalty and, as well as planning for the future, can advise on anything you may wish to do with your money now.

In this episode, Edward Rees is speaking to Mike Williams from Brewin Dolphin. They’re busting jargon, and talking about inheritance tax planning and financial wellbeing.  They explain about “the seven year rule”, gifting money, tapering and touch on trust funds.

In order to lessen inheritance tax, we’re often asked the question “Should I gift my house to my children during my lifetime?” In this episode we hear from Edward and David from our Private Client Team, who explain that this is a very complex area. They give insight into why that’s the case, and provide practical guidance.

The team is recognised in Tier Two for the West Midlands in the 2024 edition of The Legal 500, stating ‘Lanyon Bowdler advises clients across the whole of Shropshire, Herefordshire and North Wales. It has extensive experience in advising on trusts, estate planning and administration as well as other areas covering business property and agricultural relief. ‘

Chambers UK’s High Net Worth guide states: ‘The team advises clients on trusts, estate planning and administration, tax planning, contentious probate and powers of attorney.’

Put simply, tax planning means arranging your legal affairs in the most efficient way to minimise your tax obligations. It is a very specialised area and can be a daunting prospect, which is why it’s vital to have a team of experienced professionals on your side.

It usually starts with a face-to-face meeting where we get to know each other and find out your objectives. We can then set about putting a plan in place which is perfect for you and your family.

Our hope is that we will partner with you on a long-term basis, meaning we will always be aware of your needs and ambitions while fostering a relationship of trust over what we hope will be many years.

Inheritance Tax is applied to the assets (property, cash in bank accounts, investment, personal belongings and foreign assets) of someone who has passed away. The standard rate is charged at 40% on everything above the nil-rate band (or threshold) of £325,000.

So for example, if your estate is worth £400,000 you would pay 40% tax on the £75,000 above the £325,000 threshold.

There is an additional allowance available in certain circumstances and this is called the Residence nil-rate band. It is in addition to the standard nil-rate band and is presently worth £175,000. It will only be available in limited circumstances and you should seek our advice on whether it applies in your case and, if so, to what extent

Importantly, there’s no inheritance tax on anything you leave to your husband, wife or registered civil partner, or to a charity. Gifts to them are exempt from inheritance tax.

If your husband, wife or registered civil partner has already died, there may be a second (transferable) tax-free allowance of up to £325,000, unless his or her nil-rate band was used up in non-exempt gifts. The Residence nil-rate band also has a transferable character between spouses and registered civil partners. Again, you should seek our advice as to its application to your particular circumstances. However, in many cases, a couple who are married or in Registered Civil Partnership would have aggregated between them a total of £1M in nil-rate bands and residence nil-rate bands.

For tax purposes, your estate includes your share of any asset you own jointly with someone else, even if it passes automatically to the other person.

Inheritance tax has started to affect more people in recent years as higher house prices have taken more people over the nil-rate threshold – many of whom do not consider themselves as rich. Given that tax was generally paid at the time that their wealth was generated, many people also view inheritance tax as an unfair form of “double taxation”.

On the other hand, one objective when inheritance tax was introduced was the combatting of the perpetual accumulation of unearned family wealth. It was thought that the redistribution of a significant proportion of the estates of a wealthy minority might be of benefit to society as a whole.

Whatever your views are, inheritance tax is a financial fact that should be prepared for in advance.