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The benefits of Inheritance Tax planning should not be overlooked. Many of us don’t like to think ahead to later life, but it is important to plan ahead as far as possible to mitigate any heavy costs to our families.
Planning ahead is key
In one of our recent blogs we quoted research that stated more than 60% of adults still have no Will at all. This is dangerous territory, because if you die without a Will, or “intestate” it can be extremely costly for your family to rightfully take a claim in your estate. It can also cause lengthy legal battles and hurt amongst loved ones. At the very least, you should be thinking of making a Will as early on as possible.
Whilst making your Will, it is essential to consider the options in relation to Inheritance Tax (IHT) and how best to provide for your family. Doing so could well save you a fortune.
Legitimate tax planning can save thousands
We think of the example of Sir Bruce Forsyth, who died in 2017. He left his entire £17million fortune to his wife to avoid any IHT payment on his estate. He always spoke very publically about his hatred for the tax, saying “I think your inheritance should go to your children.” Now his wife has inherited the £17million, she can gift whatever she wishes to friends and family and give effect to what Bruce wanted. As the law stands at present, provided Lady Forsyth lives for seven years after making lifetime gifts, these will fall outside of her estate for IHT purposes.
However, timing is of course critical otherwise the recipient of any lifetime gift may be called upon to pay IHT depending on the circumstances.
Every situation is different, so it is important that you plan early and seek advice from those in the know. Here at Downs Solicitors, our legal team can advise the best ways you can plan for IHT. Contact us for more information.