Estate Planning

Inheritance Tax & Estate planning involves not just ensuring your estate pays as little inheritance tax as possible but that it is left to the people you want it to go to.

We can assist you, in conjunction with your existing solicitor if you have one, in the following estate planning areas:

Estate planning can involve using a very broad range of options and our task is to bring together everything in a co-ordinated and planned way, to bring in outside specialists (e.g. solicitors) when necessary and to keep abreast of the changes in legislation.

Estate Planning is one of the core advice areas for our client's and one in which we feel very comfortable in helping our client's and their families.

Wills

A Will is the only way that you can ensure that you leave your estate to your spouse, relatives, friends or charities as you would wish. If you die without a Will the intestacy rules apply which often create a less than ideal outcome, particularly if there are children.

A DIY Will should always be avoided as any mistakes in writing or the words used or it's execution could see it invalidated. You should always have the Will properly drafted by a Solicitor, preferably also a member of STEP.

Why Make a Will ? Making a Will

Deeds of Variation

A Deed of Variation is often used after death to change a deceased's Will to ensure a more favourable outcome' usually for inheritance tax reasons.

As long as the Deed of Variation is done within 2 years of the death it's provisions will usually be effective for Inheritance Tax purposes. However it is not sensible to rely on this as it is dependent upon legislation remaining unchanged and, importantly, all current beneficiaries must agree and sign. If there are many beneficiaries it can often be difficult to gain agreement and all signatures in time.

Inheritance Tax

You don’t have to be rich for your estate to be subject to Inheritance Tax. Currently it’s levied on everything you leave over £300,000 (2007/08).

• your furniture and personal effects

• the proceeds of your life insurance (unless it is written in trust).

The rate of Inheritance Tax is 40% for everyone. This is equivalent to the highest current rate for income tax. The tax is paid by those that inherit – and is deducted from the estate on death – so Inheritance Tax is relevant whether you stand to gain an inheritance or you plan to leave one and there are a number of ways we may be able to help you to reduce any possible Inheritance Tax.

We might or example, advise you to make gifts now to intended beneficiaries as these gifts are free of Inheritance Tax, providing you live for 7 years or more following the gifts. There are several other tax-efficient ways of making annual gifts, both to individuals and organisations such as charities.

You could then leave a further £300,000 free of Inheritance Tax to them in your will. Gifts between married couples incidentally are not subject to any Inheritance Tax. You might like to think about setting up a trust. If you put part of your estate into a trust for your grandchildren, it could be decades before your cash is again under the eye of the taxman. Trusts can be complicated and we will usually work in conjunction with a solicitor.

Guide to Inheritance Tax (HMRC)

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Cane Cohen Ltd, Pean Hill Park, Pean Hill, Whitstable, Kent, CT5 3BJ
Telephone : 01227 379200 Fax: 01227 479009

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