Inheritance Tax Planning Webinar
Our Inheritance Tax (IHT) planning webinar is now live and ready to view. During the webinar we examined options available to help minimise your potential IHT bill that you might have to pay from your estate.
Our one hour webinar starts with a short discussion on IHT, followed by seven steps that will help you with efficient IHT planning, a number of recent case studies and concludes with a Q&A session.
View the on demand recording of our webinar below.
Seven steps to a tax efficient heaven
Questions & Answers
Below is a list of all the questions and answers we received during the webinar. If you have any further questions please do not hesitate to get in touch.
Yes, if you are deemed domicile then you are treated as being UK domiciled from a trust standpoint.
You can set up a Power of Attorney through a Will writing company. We would recommend you contact your adviser (if you don’t have one, get in touch with us on firstname.lastname@example.org) who will be able to put you in touch with a company we work with to provide Power of Attorneys. You and your wife should both have a Power of Attorney.
Generally, your parents’ estate would not be liable to UK inheritance tax however we cannot comment on the rules regarding Polish IHT. We would suggest that you seek advice from an adviser in Poland who will be able to advise accordingly.
There are complex rules surrounding US citizens and therefore we would need more information before knowing how the Penny Group can assist. Therefore, we would suggest contacting your adviser.
As per current legislation, all private pensions (including personal pensions, workplace pensions, SIPPs etc) are exempt from IHT.
The Residence Nil Rate Band (RNRB) is in addition to the Nil Rate Band (NRB) and is a maximum of £175,000 per individual, meaning a couple can have a joint RNRB of up to £350,000 (assuming their main residence is of at least this value).
You can pass on some agricultural property free of Inheritance Tax, either during your lifetime or as part of your Will. Agricultural property that qualifies for Agricultural Relief is land or pasture that is used to grow crops or to rear animals intensively. It also includes:
- Growing crops
- Stud farms for breeding and rearing horses and grazing
- Trees that are planted and harvested at least every 10 years (short-rotation coppice)
- Land not currently being farmed under the Habitat Scheme
- Land not currently being farmed under a crop rotation scheme
- The value of milk quota associated with the land
- Some agricultural shares and securities
- Farm buildings, farm cottages and farmhouses
These do not qualify for Agricultural Relief:
- Farm equipment and machinery
- Derelict buildings
- Harvested crops
- Property subject to a binding contract for sale
We would suggest contacting your adviser with regards to putting life insurance policies into trust. The benefit of doing this is that the sum assured can be accessed by your executors prior to probate being granted, meaning the funds can be used to pay any inheritance tax due.
We would need further information on the Will and your overall circumstances before answering this and therefore would recommend that you contact your adviser.
We are not aware of any such exemption for NS&I but it would be worth checking with them directly.
Yes, the gifting allowances are per person.
- Unable to say what future governments might legislate
- SSAS currently outside of estate for IHT
Where assets are taxed for IHT will depend on whether the individual is domiciled in the UK or in India. If UK domiciled, worldwide assets will be subject to UK IHT. If UK non-domiciled, then only UK assets will be subject to IHT, and other assets may be subject to IHT in their country of ownership.
AIM stands for Alternative Investment Market, a sub-market of the LSE, generally a place for smaller companies to list.
Investments in qualifying AIM companies will be exempt from IHT if held for 2 years and at death. An AIM ISA is an ISA that holds AIM listed companies.
You must pay inheritance tax by the end of the sixth month after the person died.
You can either pay from your own bank account or a joint account with the deceased. You would be able to claim the money back from the deceased’s estate or the beneficiaries.
You can also pay using the deceased’s assets, which may need to be liquidated if invested assets are held.
If your wife is a resident in the UK she will have a nil rate band available for her UK assets at least.
Your wife’s inheritance tax position will depend on whether she is considered domiciled or non-domiciled in the UK.
Every person, UK domiciled or not, is entitled to the full nil rate band to be set against their estate that is subject to IHT.
If UK domiciled, her worldwide assets would be subject to UK IHT.
If non-UK-domiciled, only her UK assets would be subject to UK IHT, and other tax regimes may apply depending on her domicile.
The main difference regarding domiciled and non-domiciled individuals related to the spousal relief of 100% on transfer to your spouse, which does not apply if a UK domiciled spouse is transferring assets to a non-domicile. In this case, the spousal exemption is limited to just £325,000.
We would recommend seeking advice from a suitably qualified solicitor. We work closely with Cornerstone Wills, and would be happy to introduce you to them.
The Will should have created a trust that will come into force when your mum passes. You shouldn’t need an additional trust setup before she passes. However, you should check this with the solicitor who wrote the Will.
Yes the pension will remain outside of the estate for IHT. However, to ensure that the pension remains outside of the estate for future generations, the pension scheme will need to be able to facilitate nominee/successor drawdown, something that not all pensions do. We would suggest a review of the pension to ensure it is held in the most appropriate product.
The £3,000 annual gift exemption if per giftor; so each individual could only gift £3,000 per annum total. Anything in excess of this would be considered a PET.
You could potentially explore a joint borrower mortgage, where you are jointly liable for the mortgage debt. From an IHT perspective, if you were to gift a lump sum of money to your daughter to help with a property purchase, it would take 7 years from the date of the gift for the funds to be excluded from your estate if you were to pass away. If you passed away within 7 years, the gift would be included in your estate and potentially liable to IHT.