Personal Protection and Inheritance Tax Planning

There are many things to consider when looking to protect your family and your home. Inheritance tax and capital gains tax, illness and loss of income (to name but a few) need to be considered in an effective protection planning strategy.

Assessing suitable estate protection lies at the heart of what we do at Red IFA.

Without the right advice and careful financial planning, HM Revenue & Customs can become the single largest beneficiary of your estate following your death.

At present, the first £325,000 (2023/2024) of an individual’s estate is not liable to Inheritance Tax. For married couples and registered civil partners it is currently £650,000, if the full allowance is passed to the surviving spouse. Anything in excess of this amount is taxed at 40% on death.

There are some options available that you can consider to help mitigate Inheritance Tax:

  • Have your Will written and planned correctly to save the maximum amount of tax.
  • Transfer assets through the prudent use of lifetime gifts.
  • Create a tax-efficient fund to enable the beneficiaries of an estate to meet the tax liability without disturbing the family wealth. Under current IHT legislation, pensions can play a considerable role in estate planning.

Although pension death benefits are broadly exempt from IHT, if they are passed to your survivor they will form part of their estate. Red IFA can offer solutions which allow your survivor access to your death benefits without them forming part of their estate.

The information on this website is based on our interpretation of the law and HMRC practice as at April 2023. Taxation legislation and HMRC practice may be subject to unforeseen changes in the future. Wills and some areas of Inheritance Tax Planning are not regulated by the Financial Conduct Authority.

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