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Inheritance Tax Planning

Our client is an individual who has built up a large portfolio of investments and a large pension fund over many years running his own business. Prior to retirement, the majority of his wealth was within his business, which would be protected from Inheritance Tax by Business Property Relief; however, now that the business had been sold and he had invested that money, we encouraged him to meet with us to consider his Inheritance Tax position.

How we helped our client
EQ met with our client and his wife to firstly fully understand his asset and income position, along with their requirements for income and capital going forward, as well as understanding how he wished to pass his wealth down to his children.

Our client had previously been widowed and his children were from his first marriage with his wife having children from her previous marriage. It was very important to both that their own wealth passed to their own children so EQ ensured that these wishes were a top priority as well as maximising tax savings.

EQ provided the client with several options to reduce his Inheritance Tax liability while ensuring his assets passed to the intended beneficiaries. By rearranging where he drew his income from as well as making a number of gifts, we were able to secure a significant reduction in his inheritance tax liability. Some larger gifts were treated as Potentially Exempt Transfers, which would result in an Inheritance Tax charge if the client was to pass away within seven years. So, along with a Financial Advisor, we assisted him to put an insurance policy in place which would cover the liability should he not survive for this period.

The client was delighted to have significantly reduced his exposure to Inheritance Tax while ensuring his assets would be distributed in line with his wishes.

For more information or to discuss further, please contact the Private Client Taxperts.

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