Financial Planners Chartered

Growth puts inheritance planning back in the spotlight

BRITAIN has been cheered by a broad recovery in financial and property markets over the past few months, writes David Willams IFA director Nick Beal.

Share prices grew by almost a quarter in the two years to the start of October, for example. House prices in some sectors of the market have started to march forward again, benefiting homeowners and investment landlords alike. Commercial property too is showing signs of growth.

But one unwelcome side-effect of this recovery is that the nation’s rising wealth triggers a growing liability to inheritance tax.

This tax is levied at 40% on death, applying to the bulk of your private wealth above a £325,000 threshold. And recent market growth means that the bill for an untimely death is likely to be rising.

Inheritance tax is a tax of choice: you can do nothing and your family will pay the price later, or you can plan now to reduce that eventual bill.

It is an area where good advice can pay for itself many times over, and where David Williams IFA has deep experience in working with clients to cut their exposures.

There are valuable IHT exemptions around business assets for owner-managers. With sound planning, directors and partners can pass on their stake in a business to others without this transfer being taxed.

However, success in business will inevitably increase the value of your personal wealth and create a growing inheritance tax shadow there too.

Working in partnership with your solicitor or accountant, where David Williams IFA uses established planning techniques –that are recognised by HMRC – to assess and then mitigate these future tax bills.

Areas where we typically assist clients include:

  • Pensions – use of trusts to ring-fence any pension funds if you die before claiming them. This means these often substantial funds are available to benefit your family, without becoming part of their estates and hence subject to future IHT.
  • Tailored investment schemes – using business property exemptions to put investments beyond reach of the taxman after two years.
  • Gifting – devising a strategy of one-off and regular gifts to capitalise on IHT exemptions.
  • Multi-generational planning – if you are already facing an IHT bill, receiving a legacy from the generation above will simply compound the problem. Can this money perhaps skip a generation and be diverted from you to help your children or even grandchildren? Trusts can ensure that gifts or diverted bequests remain under your control.

To find out how we can help tame your potential inheritance tax bills contact David Williams IFA on 01604-621302 or by email at

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