Stratford upon Avon T: 01789 293259
Henley in Arden T: 01564 792261
Cheltenham T: 01242 228370
Birmingham T: 0121 200 0890

Plan ahead to reduce Inheritance Tax – Lodders

20/12/2013
Eamonn Daly Chartered Tax Adviser with Lodders Solicitors

The news that more people are having to pay Inheritance Tax (IHT) on death has prompted Lodders Solicitors to highlight the ways of reducing the potential liability.

The Office for National Statistics (ONS) has reported that in the year to April 2013 IHT receipts increased by eight per cent to £3.1 billion, but the figure has soared by 30 per cent during the past three years.

Lodders partner Eamonn Daly, a chartered tax adviser, said: “This is down to a number of factors, including the recovery in housing prices, household savings and equities recovering but also the freeze in the IHT threshold, which has been fixed at £325,000 since April 2009 has dragged more estates into the IHT net.

“The simplest way of planning to avoid IHT is to give cash/assets away more than seven years prior to death. However clients are often keen to keep control of the sums gifted, fearful of their intended beneficiaries spending the hard earned wealth frivolously or losing it in the event of a bankruptcy or divorce.”

Eamonn pointed out that for significant gifts of over £1 million the use of corporate structures such as Family Investment Companies (FICs) should be considered to help address these issues.

Individuals can subscribe cash or assets for shares in their own bespoke FIC and then make substantial gifts of some of the shares to beneficiaries without incurring an immediate IHT charge.

The founder of the FIC can retain significant control by the retention of voting shares.

“For smaller gifts, where an individual wishes to maintain some control, trusts are still the main lifetime IHT mitigation tool,” Eamonn advised.

“Where the total of assets to be gifted does not exceed the individual’s IHT threshold of £325,000 – or £650,000 for a couple – trusts are usually the most flexible solution,” he said “above these figures lifetime IHT is payable on assets transferred to most trusts at 20 per cent.”

He stressed that whatever the level of cash and assets held over the £325,000 or £650,000 joint threshold, professional advice could help to significantly decrease the IHT burden and protect family wealth.

Lodders Solicitors has offices in Cheltenham, Stratford-upon-Avon and Henley-in-Arden.

For more information please contact Eamonn Daly on 01789 206142 or by email.

Lodders raises £4,000 for Cheltenham and Gloucester ...
Posted on 7th November 2019 in Press News
Read full article
Lodders retains highest rankings in legal guide
Posted on 16th October 2019 in Press News
Read full article
First anniversary celebrations for Lodders
Posted on 1st October 2019 in Press News
Read full article

If you’re a journalist looking for more information about Lodders, or to discuss a press release, please contact:
Diane Wood, V Formation on 07887 794507 or by email