Estate Planning - Reduce Inheritance Tax Liability
Client: Retired Professional and Spouse
Category: Lifetime Cash Flow, Estate Planning
The Challenge
Married couple aged 80 and 79. They had a total estate valued at £1.3M with ‘liquid assets’ worth £725,000. Inheritance Tax (IHT) liability at the time was £260,000.
Our Approach
I described the Lifetime Cash Flow process to them and explained how a range of IHT planning products were available to use to reduce IHT immediately and also in two years time.
Service Delivery
We engaged digitally with the client to gather all relevant financial information through a factfinding process, recording all income sources, outgoings, assets and liabilities recording what the client wanted to achieve. In this instance, it was to reduce the IHT liability of £260,000 as much as possible without compromising their retirement lifestyle. We utilized a series of investment products that qualified for Business Property Relief (BPR) removing them from IHT after two years. Further, we used a Discounted Gift Trust (DGT) to obtain an immediate reduction of IHT on the estate. Finally, we also switched some ISA’s into an IHT ‘friendly’ investment. The whole process took three months to deliver. Clients also felt comfortable making Gifts to their three children under Potentially Exempt Transfer (PET) rules.
The Outcome
The client became fully engaged in the process, valued the advice and gained absolute clarity about how their assets could deliver the