Trusts and tax planning options for you and your family

  • Due to the complicated capital taxes landscape, it is becoming increasingly likely that you will need to consider inheritance tax (IHT) in your overall financial planning
  • IHT planning can help minimise financial worries for those you leave behind
  • By utilising our expert team of tax lawyers and our chartered tax adviser, we can work with your trusted financial professionals to optimise the possibilities open to you

The issues of trusts and tax planning is an incredibly complex matter that requires significant legal insight to ensure that the best decisions are made. We take time to understand your and your family’s requirements, meaning our advice will always be tailored to you and your family’s needs.

Amongst other strategies, life insurance may help those you leave behind with the ability to pay inheritance tax, freeing them from any financial worries concerning how they themselves may fund the tax. It is therefore important to ensure that your insurance policy is written into trust, otherwise the policy proceeds may be counted towards the value of your estate.

We can advise on any death in service benefits (which may flow from a pension scheme membership), and life policy proceeds. Certain financial products can help form part of the overall inheritance tax planning strategy for you and your family, and we can help make this whole process run efficiently and with ease.

What is trust and inheritance tax planning?

Trust and inheritance tax planning involves strategies for minimising the amount of inheritance tax owed on the transfer of assets from one generation to another. This can involve setting up trusts or utilising exemptions and allowances to reduce the amount of tax owed. The goal is to ensure that as much of the inheritance as possible goes to the intended beneficiaries, rather than being lost to tax.

Providing ongoing assistance with trusts and inheritance tax planning in a process most suited to you

Trusts provide a useful tool for tax planning purposes, and can benefit you, your family and future generations.

When conducting estate planning, we assess each element of tax legislation that is appropriate for your circumstances in order to minimise your exposure to tax and to maximise the reliefs available to you. We understand that everyone’s circumstances are different, and we are able to advise you on the trust most suited to your needs, including whether a trust would be the most appropriate option for you.

We will provide you with on-going advice on Agricultural Property Relief and Business Property Relief as well as both the use of and potential impact of other types of capital tax relief such as Holdover Relief, Rollover Relief and Entrepreneurs Relief.

Why choose us as your inheritance solicitors?

Our team of expert tax lawyers and our chartered tax adviser will work alongside your financial adviser, accountants, and other trusted professionals to ensure that the best steps are taken to optimise your options, always keeping your and your family’s best interests in mind.

We will always provide tailored advice to meet your needs and circumstances regarding every aspect of trust law.

Many of the issues regarding trusts and tax planning can be extremely complex and we understand that it might be a stressful time for you, which is where our proven ability to work seamlessly with your financial advisers would come into the fore.

We have offices in Richmond, Southampton, Guildford, Lymington, London and Woking and we offer specialist support to clients both locally and nationally.

FAQs on inheritance tax planning & trusts

We’ve included below some answers to the most common questions and topics we are asked about as experienced inheritance tax solicitors. If you can’t find the answer to your query here, please contact the team using the form on this page. We would be more than happy to answer your questions.

Wills, trusts and estate planning generally refers to some of the steps that an individual or family might take to help protect their wealth and ensure that their wishes are carried out in regard to the division of their assets and beneficiaries after they pass away.

A will is the legal document that outlines someone’s wishes for their estate after their death. It usually includes which assets should be given to which beneficiaries and may also include details of charitable donations that the will holder wants the executors to make on their behalf from the estate.

Trusts are a way to set certain assets aside for a period of time after the owner of the estate passes away. They are often used to protect money that will be given to children or grandchildren once certain criteria have been reached e.g. coming of age.
Estate planning refers to wills, trusts and any other processes or tools used to legally document and facilitate an estate being divided up according to the wishes of the individual concerned, once they have passed away.

Tax planning is the process of using a range of legal provisions to minimise the amount of tax due. In the context of estate planning, tax planning is used to reduce the tax liability of an inheritance. This is legal in the UK, common practice and is very different to tax avoidance.

Tax planning is important because it enables beneficiaries of an estate to minimise the inheritance tax due on the money or other assets they have received. Effective inheritance tax planning can mean that people are able to pass on as much as possible to their loved ones after their death.

Inheritance tax is a tax due on the estate of someone who has passed away. Their estate usually comprises of any property they own, any savings, investments or other assets that they have.

Inheritance tax is only due on estates with a value of £325,000 or more (the current threshold) and is charged on the portion of the estate that is above this threshold.

The current standard rate for inheritance tax is 40%. This means that 40% of the value of portion of the estate that is above the current threshold will be due to the UK government by the end of the sixth month after the person passed away.

However, there are many different provisions that can reduce this tax liability, which can often mean that more of the inheritance is passed over to the recipients that otherwise would be. Some examples of this include if a property is being left to a family member or if a specific percentage of the net estate value is donated to a charity.

This can be a complex area of law and some things which may have been gifted to beneficiaries while the individual was still alive could be subject to inheritance tax, depending on the circumstances. It’s important to take expert legal advice when tax planning for your estate.