Inheritance tax – don’t delay, plan today 

Inheritance Tax (IHT) planning can be a difficult subject to talk about within families and therefore the issue is often ignored. However, this could mean you are passing on a potential problem for your dependents to address upon your death. You may not even be aware of possible issues if you haven’t discussed your circumstances with a professional adviser.

As the UK taxman looks set to become more reliant on the highest-earning income tax payers, it is likely that IHT may be targeted to help meet rising costs. We have seen examples such as the abandoned ‘Dementia Tax’ in the Conservative election manifesto. The proposal wasn’t well received because payments after death could affect the inheritance of offspring whose parents suffer from a condition like Alzheimer’s, because of which, reliance on social care is inevitable.

IHT which is payable on an individual’s estate on death is currently paid by approximately one in 25 families. Previously only targeted at the wealthy, as property prosperity increases, more people are paying IHT and last year, the Government collected a record £4.6 billion in tax from estates in 2016, which is almost double the £2.4 billion received in 2009-10.

Camilla James, partner and head of the private client team at Square One Law, says: “IHT is a significant and sustainable source of Government revenue and this reported increase shows that thousands of people are choosing to ignore or delay addressing the issue of IHT.

“If more people had put suitable IHT plans in place, the amounts generated could have been considerably lower, and their families might not have needed to pay such a large IHT bill.

“Planning to reduce the impact of IHT and to ensure your estate passes as you would wish is important and there are certain reliefs still available which will reduce your IHT bill, including Business Property Relief (BPR), which allows family-owned companies to be transferred free of IHT, or at a reduced rate. One major advantage is that clients only need to live for two years to benefit from BPR, rather than the seven years needed if money is given as an outright gift.”

How can Square One Law help you? 

Square One Law’s private client team has an exceptional ability to understand your personal family requirements and manage complex tax arrangements. The team works closely with its clients to make sure they understand how their assets could be taxed in order to make informed decisions about their future. By undertaking a full review of your situation, they can ensure your assets go to your beneficiaries rather than HMRC.

Camilla has a background in tax advisory work, gained at international firm EY in London. Her experience in complex family succession issues and estate planning is unrivalled in the North East and her ability to understand and help manage multi-generation family arrangements and provide solution-driven advice means her support to families and entrepreneurs is invaluable.

Consultant Robin Winskell works with Camilla and is a highly experienced private client lawyer and a trusted adviser to numerous high-net-worth individuals, entrepreneurs and family businesses. He specialises in succession planning, matrimonial issues and financial settlements.

He says: “The taxation landscape is destined to change over the coming years as the Government looks for further tax receipts to meet the rising costs of social care, public sector pensions and

infrastructure costs. This may well mean that reliefs currently available to mitigate IHT are, in the future, limited or removed altogether. Clients are therefore being encouraged to be proactive in their planning to ensure that full advantage is taken of the reliefs that are presently available.”

Square One Law 
For further information please contact camilla.james@squareonelaw.com
www.squareonelaw.com
@SquareOneLaw

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