Funeral Guide 2020

PROTECT AND INVEST Estate Planning and Equity Release

Inheritance Tax is a growing problem for many in the UK. With careful planning this tax can largely be avoided, leaving more to pass on to loved ones. As the average value of estates rise, an increasing number are now valued over the inheritance tax nil rate band, which has been frozen at £325,000 since April 2009. Although individuals who own their own home and have direct descendants also benefit from the residence nil rate band (£175,000 in 2020/21), inheritance tax receipts will continue to grow in the coming years, largely due to rising asset values. anything above the nil rate band, so inheritance tax planning can help save a large amount of tax. There are numerous ways individuals can reduce their inheritance tax bill. A number of gifts are exempt from inheritance tax, including gifts to charities, gifts that are part of normal expenditure out of income and gifts of up to £3,000 each tax year (any unused part of this allowance can be carried forward for one year). There are also special reliefs on business property and agricultural property, under which 50 per cent and 100 per cent of the value may be exempt. Other ways to manage, reduce or eliminate an inheritance tax bill include using trusts, taking out a life insurance policy to cover the tax bill and preserving Inheritance tax is usually charged at 40 per cent on

your pension by utilising other assets to provide a retirement income. A lower rate of inheritance tax of 36 per cent will apply where 10 per cent or more of an individual’s net estate is left to charity. For the over 55s, releasing equity from your home can reduce the value of your estate for inheritance tax purposes. You will benefit from the full value of the home, by continuing to live in it, while at the same time benefitting from the money tied up in your property. You can release the tax free cash in one lump sum, or via flexible borrowing to match your needs, whether this be for home improvements, supplementing your retirement income or debt management. The amount you can release usually depends on your age, health and value of your home, as well as the provider. Although equity release can be a useful tool to release funds from your home, it is not suitable for everyone and there may

be more suitable alternatives available. This is why it is important to seek professional financial advice. Protect and Invest will guide you through the process and options available. They will encourage you to discuss your plans with your family, as it will affect their future inheritance, and they will make recommendations based on your personal circumstances and objectives. If you wish to discuss equity release, or how estate planning can reduce your inheritance tax bill, contact them on (01635) 800820 or email them at fs@protect-invest.com for expert financial advice. They offer the first meeting for free, with no obligation to proceed, to discuss how they can help and the options available. Taking action early means more of your money will go to your loved ones and less to the taxman. Advertisement Feature

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