How to reduce your inheritance tax bill

Without proper guidance and financial support, Inheritance Tax (IHT) can cost families hundreds of thousands of pounds. Find out how we saved John and Jane over £250,000 in inheritance tax.

View more case studies

John and Jane were concerned about how much inheritance tax their family may pay when they eventually die.

After a lifetime of working hard, and saving prudently, they wanted their savings to be passed on tax-efficiently.

By working together, we were able to save John and Jane’s beneficiaries over £250,000 in inheritance tax. This was done by:

  • About the Client

    John and Jane are in their early 70s. They are both retired and receive enough income from their State Pensions and final salary pensions.

    Over their lifetime, they have accumulated a range of assets, including their home, a holiday home, defined contribution pensions, stocks and shares ISAs as well as investment bonds. The total value of their estate is around £3m.

    They are concerned about how much inheritance tax their family will pay when they eventually die. They have worked hard and want their savings to be passed on tax-efficiently.

  • Challenges and Objectives

    Whilst John and Jane understood that inheritance tax would be payable, they weren’t sure how much their inheritance tax liability was. This gave them great concern, as they had heard that up to 40% of their money could be lost in tax.

    Although they were unlikely to spend the money in their lifetime, they weren’t ready to give up control or access. They wanted to make sure they had enough money to enjoy themselves, and pay for any care costs later in life.

    Their aim was to understand how much their inheritance tax liability was, and to take prudent steps to minimise this, whilst ensuring they have enough money for themselves.

  • How We Helped

    By working together, we were able to save John and Jane’s beneficiaries over £250,000 in inheritance tax. This was done by:

    1. Placing assets into trust (IHT saving = £130,000):
    This ensured that the assets were outside of their estate for inheritance tax purposes, however still provided them with access to some of the income.

    2. Improving their pension death benefits (IHT saving = £100,000):
    This ensured that their beneficiaries could inherit their pensions free of inheritance tax, rather than have it paid out as a taxable lump sum and included within their estate.

    3. Making use of their allowances (IHT saving = £20,000):
    We established a regular gifting plan that used their annual allowances in a flexible and tax-efficient way. This allowed their children to benefit from the money now whilst reducing the value of their estate.

    John and Jane now feel much more at ease with their estate planning. They have a plan that maximises the value of their estate, whilst minimising the amount paid in inheritance tax.

Why Work With Frazer James?

Six ways you can benefit from working with Frazer James

1. Expert financial planners

Highly qualified professional advisers, including Certified Financial Planners, Chartered Wealth Managers, and Chartered Financial Advisors.

2. Award-winning

Award-winning financial advice - Financial Advisor of the Year South West (2021) and Financial Advisor of the Year UK (2021).

3. Inheritance tax specialists

Specialised in inheritance tax planning and with particular expertise in estate and tax planning.

4. Fixed flat fees

Fixed flat fee, so that you get to keep more of your hard-earned wealth. No hidden fees - you will never receive an unexpected invoice.

5. Independent financial advice

Impartial financial advice on all aspects of your finances. We are independently owned and operate independently of any bias or conflict.

6. Fiduciary financial planners

As fiduciary financial planners, we have your best interests at heart. So you’ll be able to make big financial decisions with confidence.

Book a meeting now using the calendar below:

.

Contact us

Are you looking to partner with an award-winning independent financial adviser? Make smarter decisions with your finances - book a call with an expert today.