I think it’s time we walked about a topic we have put on hold for weeks. Today, I want you to picture what life will be for your loved ones when you are gone.
For many of my clients, inheritance tax planning is not something they are open to talking about. After all, it is hard to envision the outcome for your family upon death. However, today we will look at two strategies you can use to protect your family from financial backslides due to poor estate planning.
A few weeks ago, I had a guest over to talk about the basics of inheritance planning (use of wills and gifting). This week, you will be learning more about inheritance tax planning from our guest Mr. Aidan Dow of Aidan Dow Wealth Management.
Aidan talked about two main inheritance tax planning strategies you can pay attention to in order to secure your family’s future. They are:
- Using Family Trusts
You may use family trusts to keep your estate within your family. With a trust in place, your beneficiaries have a legal standing to inherit your estate. You set up a trust and transfer assets. You then name your beneficiaries – those to whom your wealth will transfer – and trustees to enforce the conditions of the trust.
Trusts protect inherited property, as Aidan pointed out. One circumstance where having a trust matters is when you want to ensure the inheritance still passes to your children even with the remarriage and divorce of your surviving spouse.
- Investing in Assets with Tax Benefits
If you are passionate about propagating small businesses and hold no fear for high-risk investment, this method of inheritance tax planning would be suitable for you, Aidan affirmed during our session.
Assets such as in-shares and venture capital trusts fall outside your estate when owned for more than two years. With such assets, you can save your beneficiaries from paying the 40% inheritance tax usually charged on property worth above £325,000.
So, the next time you are thinking about taking care of your loved ones with inheritance tax planning, remember these strategies. Additionally, consult with an expert to help you plan your estate the best way you can.
P.S. If you find this content useful, we do provide tailored professional advice on your personal or business tax matters. If you are interested, please book me in via the link so we can arrange a chat: https://hannah-xu.youcanbook.me