Inheritance Tax
Many people face the potential of a rising inheritance tax liability as their personal wealth increases at a faster rate than the nil rate band threshold.
The Treasury are reaping ever-greater rewards from inheritance tax revenues and have little incentive to make it easier for individuals to avoid paying the tax. Indeed, in recent years they have taken additional steps with, for example, the introducation of Pre-Owned Asset Tax and changes to the taxation of "interests in possession" and "accumulation and maintenance" trusts, which are likely to increase tax revenues further.
These actions are in stark contrast to the wishes of many individuals who are keen to pass on as much of their wealth as possible to their beneficiaries provided it does not impinge on their own lifestyle while they are still alive.
Thankfully, despite the efforts of the Treasury, there are still a number of approaches and allowances that can effectively mitigate a potential inheritance tax liability. These range from making specific gifts, using trust arrangements, taking out life assurance or simple rearranging existing finances to make them more effective in relation to inheritance tax legislation.
The suitability of each of these strategies will be determined by an individual's own personal circumstances, objectives and beliefs. Each approach may have advantages in certain situations, but can result in potential pitfalls such as increased costs or a reduction in flexibility of, or access to, particular assets.
Once inheritance tax planning arrangements are in place, whichever course of action is adopted, it is essential they are reviewed on a regular basis to take account of changes in the individual's circumstances or legislation.
MML Financial Associates have a thorough knowledge of inheritance tax mitigation techniques. We have the support of a technical department whilst also working with other professional connections such as accountant and solicitors.
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