Anyone contemplating IHT planning should consider their position if they do nothing, because any planning they engage in will not be for their personal benefit, and the planning is likely to incur costs, demands on their time and the need for decisions to be made. For some, doing nothing will result in a satisfactory outcome, even though tax may end up being paid.
For others, reducing the IHT exposure on their estates is an important objective to try to ensure the financial security of future generations. They might consider making gifts directly to their heirs, or using structures that allow them to retain some control over the amounts gifted, such as trusts or family investment companies. If gifts are not desirable, making investments that qualify for statutory reliefs can be attractive, subject to understanding the risk characteristics of the underlying assets. It is usually the case that a combination of gifts, use of exemptions and other planning will meets the needs of a particular situation, and that is where the skill of an adviser can add significant value.
This article is intended to provide a general overview of IHT and some of the planning that can be undertaken. It is not a comprehensive review of all of the options – other, more complex, strategies exist and no one solution is appropriate in all circumstances.
Adam Benskin is a director of Strabens Hall
Key points
IHT can be triggered when someone dies, but can also be triggered during their lifetime.
For chargeable lifetime transfers, the tax is payable within six months of the month in which the transfer occurred.
George Osborne announced a new RNRB in the Summer Budget 2015.
