Do you own your residence?
Your residence
If your home is inherited by a child or grandchild, your estate may benefit from up to an extra £175,000 tax free amount.
You can find out more here.
Are you planning on selling (either now or in the near future)?
Will you be buying a new home?
Will there be any unused sale proceeds not needed for other purposes?
Assuming you will continue to occupy your home you would be happy to either
(i) Give away your home but pay a full market rent to the person(s) you give it to to continue to occupy it? or
(ii) Give away a share in your home and jointly occupy it with the persons(s) you give it to?
Would you consider taking a mortgage on your home (with deferred interest rolling up on the loan) in order to release cash to make a lifetime gift?
Consider lifetime gifting with cash (see Cash below).
Discuss the possibility for planning with your Charles Stanley planner.
A lifetime mortgage with rolled up fixed interest and a “no negative equity” guarantee might be worth considering.
Charles Stanley does not provide advice or guidance on lifetime mortgages or equity release loans.
Charles Stanley does not recommend Equity Release Loans
No lifetime planning would appear to be possible. The value of your interest in your home should be included in your estate potentially subject to IHT.
Discuss the residence nil rate band, Will planning and provision for IHT with your Charles Stanley planner.
Do you own a second home?
Second Homes
Are you planning on selling?
Will you be buying a new home?
Will there be any unused sale proceeds not needed for other purposes?
Do you want to continue to use your second home?
Are you happy to pay a full market rent for the periods during which you occupy the property?
Consider lifetime gifting with cash (see Cash below).
You could consider gifting it. There are various options depending on the degree of control you wish to keep.
You should discuss this and the possible capital gains tax and IHT implications with your Charles Stanley planner.
A gift would probably represent a gift with reservation of benefit and so would not achieve its IHT planning objective.
The value of your interest in the property should therefore be included in the value of your estate.
Discuss Will planning and provision for IHT with your Charles Stanley planner.
No lifetime planning would appear to be possible. The value of your interest in your home should be included in your estate potentially subject to IHT.
Discuss the residence nil rate band, Will planning and provision for IHT with your Charles Stanley planner.
Do you own a Buy-To-Let property?
Do you need/wish to continue to receive the income from the property?
Do you anticipate needing or requiring to realise and have access to the capital value of the property?
Although no simple effective gift of the property is possible, more complex solutions do exist but
will necessitate bespoke legal advice. On the assumption that no planning is possible the value of your interest in your property should be
included in the value of your estate. Discuss Will planning and provision for IHT with your Charles Stanley planner.
A tax effective gift of the property may be possible.
The gift will represent a disposal for capital gains tax (CGT) and so the IHT and CGT implication of the gift needs to be considered.
Discuss this with your Charles Stanley planner.
Do you own all or part of an interest in a business?
Your Business
These questions are appropriate for limited companies, partnerships, limited liability partnerships and sole traderships
Are you about to sell your interest in your business?
Have you owned your interest in your business for more than two years and the business is substantially a trading business (i.e. not an investment business)?
Your business interest is likely to qualify for business relief and thus be free of inheritance tax. Despite business relief do you wish to retain current ownership of your entire interest in your business?
Do you currently wish to retain ownership of your share of the business?
Some trust planning may be appropriate to retain the tax relief provided for business property.
This is a complex area and you should discuss with your Charles Stanley planner.
Some future IHT planning may be appropriate. <br/>
Subject to this, discuss Will planning and provision for IHT with your Charles Stanley planner.
Do you have investments other than cash (bank/building society), pension & ISAs?
Investments
Consider these questions in relation to each of your investments.
ISAs and Pensions should not be considered as they cannot be gifted.
Do you need to retain access to your investment or the income from it?
Would you be happy to dispose of your investment to realise cash – taking account of any tax liability that may be triggered?
A gift of your investment would appear to be possible. Do you need to retain control over who receives the benefit of your gift i.e. you do not wish to make an outright transfer?
Is there an unrealised capital gain in your investment?
Are you happy that (depending on the type of investment) capital gains tax may be payable on any capital gain resulting from the gift that is not exempt?
A range of planning options exist with cash. Discuss with your Charles Stanley planner (See Cash below)
There may be an opportunity for planning if your investment portfolio includes investment bonds –
you should discuss with your Charles Stanley planner. Otherwise, no planning would appear to be possible and you should include the value of
your investment in your estate. Discuss Will planning and provision for IHT with your Charles Stanley planner.
A transfer to a discretionary trust could deliver control and also defer any capital gain. Discuss this possibility with your Charles Stanley planner.
An outright gift of your investment may be possible. Discuss with your Charles Stanley planner.
A transfer to a discretionary trust could be a way of deferring the capital gain.
Subject to this, the value of your investments should be included in the value of your estate.
Discuss with your Charles Stanley planner.
Do you have Cash (bank/building society)?
Cash
Do you need to retain access to or the income from your cash?
Which of the following best describes your need for access:
Are you happy to make an outright gift of the cash – “no strings attached”?
A Discounted Gift Trust or Loan Trust may be appropriate. Discuss with your Charles Stanley planner.
Subject to any possible planning to effectively move the value of the cash from your estate, the value of your cash should be included in the value of your estate.
Discuss Will planning and provision for IHT with your Charles Stanley planner.
A Loan Trust or an investment qualifying for business relief may be appropriate.
Discuss with your Charles Stanley planner. Subject to any possible planning to effectively move the value of the cash from your estate,
the value of your cash should be included in the value of your estate. Discuss Will planning and provision for IHT with your Charles Stanley planner.
Discuss with your Charles Stanley planner.
A gift into trust may be appropriate to give continuing control (via the trustees) over who gets what and when.
Subject to any possible planning the value of your cash should be included in the value of your estate.
Discuss Will planning and provision for IHT with your Charles Stanley planner.
Do you have a pension plan?
Your Pension
Your pension fund is free of inheritance tax although income tax would usually be payable on any death benefits taken if your death occurs after age 75.
Do you want your family, dependants, beneficiaries to have full and unconditional access to what remains in your pension fund after your death?
You should ensure that your expression of wishes in relation to the destination of your death benefits is up to date.
You should also consider discussing potential planning possibilities in relation to the death benefits under your pension with your Charles Stanley planner.
Post death pension benefits can be taken ‘in instalments’ (with any “undrawn” money remaining in the tax effective pension fund) or as a lump sum.
In the latter case, a trust into which the death benefits could be paid may be worth considering. Discuss with your Charles Stanley planner.