Inheritance Tax Guide

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Need help understanding Inheritance Tax?

Our highly experienced independent financial advisers can help you to preserve

your wealth and minimise the effects of Inheritance Tax.

Get in touch to talk to us about your current situation or to arrange a meeting with one of our

advisers. There is no charge for an initial meeting with an Ascot Lloyd adviser.

Call 0345 475 7500 Visit www.ascotlloyd.co.uk Email info@ascotlloyd.co.uk

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One of the biggest impacts on your ability to preserve

your wealth is Inheritance Tax (IHT). However, IHT is

often referred to as a voluntary tax because there are

a number of strategies that can be employed to

mitigate the liability. These range from taking simple

steps such as making gifts to more complex and

contentious structured strategies. Considering your

IHT position is often central to any sound financial

plan. Effective financial planning will ensure that your

loved ones are the biggest beneficiaries of your estate

and not the Treasury.

This guide is designed to give you an overview of IHT

and looks at the main ways you could reduce your

IHT liability. However, because everyone’s financial

circumstances are unique the strategies outlined in

this guide may not be suitable for your particular

circumstances; therefore, independent specialist

advice should be sought.

Before making any investment you should read and

understand the particular terms and conditions of

that scheme and be aware of the risks associated

with that investment.

More recent changes have included the shake-up of the IHT treatment of trusts in 2006, the introduction in 2007 of the transferable Nil Rate Band (NRB) for spouses and civil partners and the introduction of the Residence Nil Rate Band (RNRB) in the 2017/18 tax year.

IHT is an increasing problem for many people. Years of sustained house price inflation means that more and more estates fall into the IHT net. IHT now affects a significant proportion of the population and not just the wealthy.

IHT is most commonly paid on the value of an individual’s estate on death, but can also be due on some lifetime wealth transfers. For death estates, it is currently charged at a rate of 40% on the value of your worldwide assets, less any reliefs and exemptions, and above a minimum allowance (known as the NRB).

What is Inheritance Tax?

Inheritance Tax (IHT) has undergone many changes since it was first established in the UK.

In the 17th century tax on wealth at death (Probate Duty) was introduced and the modern

IHT regime replaced the Capital Transfer Tax regime in the mid 1980s.

There are few exemptions to the definition of worldwide assets; worldwide assets include, but are not limited to, your properties, investments, life assurance policies and personal belongings such as jewellery, cars, furniture.

The NRB is currently £325,000 and is set to remain at this level until 2020/21. The RNRB was introduced from 6 April 2017; if your home is left to direct descendants, or in some situations a trust, your estate can benefit from the addition of the RNRB to set against the property value.

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Combating Inheritance Tax

The good news is that a range of IHT mitigation techniques are available to address any potential liability, and these can be easily incorporated into the financial arrangements of any individual whose estate is likely to exceed the available thresholds. A good IHT mitigation strategy will ensure that as much of your wealth as possible is distributed in accordance with your wishes.

Changing economic and political fortunes means that there is usually no advantage to be gained from adopting a ‘wait and see’ attitude; losses seldom, if ever, accrue through taking action and significant advantages may be gained should detrimental changes be introduced to the existing regime.

Her Majesty’s Revenue and Customs (HMRC) continues to be active in blocking perceived loopholes and more aggressive planning strategies. We therefore continue to monitor the potential impact of any new legislation on planning options.

Reducing your liability

A number of simple measures exist which can make a substantial difference to your IHT liability. Taking a long term view to IHT planning is essential to ensure you maximise the benefits of the exemptions.

• Making a will

• Sharing assets

• Making full use of IHT exemptions and reliefs

• Pension funding using new flexible pension rules

Source: Office of National Statistics, 27 March 2018

• Maximising the NRB and the new RNRB

• Making lifetime gifts

• Ensuring beneficiaries have enough money available to pay any IHT liability

Key considerations

Inheritance Tax Receipts and the Nil Rate Band

Reve

nue

- £ b

illio

ns

Tax Year

5.0

4.5

4.0

3.5

3.0

2.5

2.0

1.5

‘09-’10 ‘10-’11 ‘11-’12 ‘12-’13 ‘13-’14 ‘14-’15 ‘15-’16 ‘16-17

£2.398b

£2.722b£2.915b

£3.12b£3.422b

£3.826b

£4.676b£4.849b

£450,000

£425,000

£400,000

£375,000

£350,000

£325,000

£300,000

£275,000

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Inheritance Tax Examples

HMRC

*Circa 20% of the estate is being paid to HMRC

Your family£308k each £360k*

Current Asset Portfolio

Asset Value

Total estate £1,900,000

Less NRB -£650,000

Less main RNRB -£350,000

Taxable estate £900,000

Tax @ 40% £360,000

Net distribution to beneficiaries

£1,540,000

Restructured Asset Portfolio

Asset Value Potential solution

Main residence £950,000 Retain

Cash savings £650,000£500k placed in trust and £150k retained in cash (gift income)

Investment ISAs £300,000 Switched to AIM ISAs

Total estate £1,900,000

Taxable estate£100,000 x 40% = £40,000 due

Potential IHT saving £320,000

HMRC

*Circa 20% of the estate is being paid to HMRC

Your family£372k each

(instead of £308k)£40k*

(instead of £360k)

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Even if you already have a will in place, keep it under review as circumstances and legislation change. For example, any will drawn up before 2014 will not take into account the new Pension Freedom rules. Older wills may not take into account changes to the trust rules in 2006 or the 2007 right to transfer any unused portion of a NRB to a surviving spouse or civil partner. Even wills updated since those dates might need to be revisited in light of the introduction of the new RNRB.

Much like your financial plan, your will should be re-visited on a regular basis to ensure it remains relevant and up-to-date.

Intestacy rules

If a will is not in place at the time of your death, your estate will be shared out according to pre-defined rules. Your family circumstances will dictate who inherits and how much they will inherit. Only married or civil partners and some other close relatives can inherit under intestacy rules. Typically, your partner will receive the majority of your estate under these rules; but where they may no longer be with you, your children are next in line. Depending on your family set-up intestacy rules will affect everyone differently. Different rules apply to different areas of the UK.

Making a Will

Drafting a will helps to ensure that your assets are distributed according to your wishes.

It can also assist with IHT planning.

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Intestacy RulesEngland and Wales

ARE YOU MARRIED OR A REGISTERED CIVIL PARTNER?

Yes

Yes

No

No

Yes

No

Do you have any children?Your partner inherits the entire estate

Is your estate worth more than £250,000?

Your partner inherits the entire estate

Your partner inherits personal effects, the first £250,000 of your estate

and half of the residue. The remaining half goes to the children (or their children)

Estate passes to The Crown

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The Citizen’s Advice is a

good place to find out more

about these rules and how

they will affect you.

www.citizensadvice.org.uk

No

No

Yes

Yes

Yes

No

No

Yes

Yes

No

YesNo

Do you have any children?Estate is divided equally

between children

Do you have any siblings?Estate is divided equally

between siblings

Do you have any grandparents?

Estate is divided equally between grandparents

Do you have any parents?Estate is divided equally

between parents

Do you have any half-siblings?Estate is divided equally

between half-siblings

Do you have any other relatives?

Estate is divided equally between other relatives

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Intestacy RulesScotland

ARE YOU MARRIED OR A REGISTERED CIVIL PARTNER?

Yes

Yes

No

No

Do you have children?Your spouse gets:

• Your interest in the house up to £473,000

• Furniture and household items up to £29,000

• £89,000 of the balance

If there’s moveable estate left after that:

• Half goes to your spouse

The remaining estate passes as follows:

If you have parents and brothers and sisters:

• Half goes to your parents equally• Half to your brothers and sisters

equally

Brothers and sisters only:

• Shared equally between them

Parents only:

• Shared equally between them

Spouse only:

• Your spouse gets what’s left

Your spouse gets:

• Your interest in the house, up to £473,000

• Furniture and household items up to £29,000

• £50,000 of the balance

If there’s moveable estate left after that:

• One third goes to your spouse

• One third goes to your children, split equally between them

The remaining estate is shared equally between your children

Estate passes to The Crown

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The Citizen’s Advice is a

good place to find out more

about these rules and how

they will affect you.

www.citizensadvice.org.uk

No

No

Yes

Yes

Yes

No

No

Yes

Yes

No

Yes

Do you have any children?Estate is divided equally

between children

Do you have uncles and aunts?Your estate is shared

equally between them

Do you have great aunts or great uncles?

Your estate is shared equally between them

Do you have parents and/or brothers and sisters?

Do you have grandparents?Your estate is shared

equally between them

Do you have any other close relatives?

Your estate goes to them

If you have parents and brothers and sisters:

• Half goes to your parents equally

• Half goes to your brothers and sisters equally

Brothers and sisters only: your estate is shared equally between them Parents only: your estate is shared equally between them

No

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The Nil Rate Band

Each individual has their own Nil Rate Band (NRB). This means that their estate and taxable gifts are exempt from IHT up to this band, currently £325,000, and it is set to remain at this level until 2020/2021.

Any part of the estate up to the NRB threshold is chargeable to IHT at a rate of 0%. Any part of the estate that exceeds the NRB threshold is chargeable to IHT on death at 40%. Since 2007 it has been possible for married couples and members of a civil partnership to transfer the unused proportion of the NRB. This means that any part of the NRB that is not used when the first spouse or civil partner dies can be transferred to the surviving spouse or civil partner for use on their later death.

If no part of the NRB is used on the first death the surviving spouse or civil partner can have a NRB allowance of £650,000, based on current rates.

Nil Rate Band and Residence Nil Rate Band

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The Residence Nil Rate Band

The Residence Nil Rate Band (RNRB) was introduced on 6 April 2017. It is conditional on the family home being passed down to direct descendants (primarily children, grandchildren and their spouses) or in limited cases via a trust. It applies to deaths after 5 April 2017.

The RNRB will be phased in over four years with the full allowance of £175,000 being reached on 6 April 2020. The allowance applies to each individual and is in addition to the standard NRB. This means that from 2020 a married couple or civil partners could each have £500,000 of NRB and RNRB available.

The RNRB will be reduced if the value of the property is less than the band as it is not possible to set the band against other assets in the estate. Where there is more than one qualifying property an election can be made as to which should be treated as the family home.

Those with larger estates may not see any benefit from the RNRB as it is reduced by £1 for every £2 that the deceased’s net estate exceeds £2 million.

Reliefs such as Business Property Relief and Agricultural Property Relief are ignored when calculating the value of the estate.

The RNRB can be transferred on death between spouses and civil partners along the same lines as the standard NRB. There are also provisions to ensure an individual who has had to sell the family home or down size, for example to pay for care costs, can retain benefit to this new band; this is subject to the replacement property or any assets derived from the disposal forming part of the estate that passes to the direct descendants. Any such downsizing or disposal has to have taken place after 8 July 2015 but there is no time limit between the date of the disposal and the date of death.

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Gifts and Exemptions

The gift allowance has not increased since 1981 when a sum of £3,000 was almost

sufficient to put down a 10% deposit on the average London property. Whilst the

gift allowance may no longer constitute a significant amount, it is still an important

consideration when minimising the IHT burden.

Gifts between UK

domiciled spouses and

registered civil partners

Gifts between spouses and civil partners are exempt from IHT both during lifetime and on death. If the death estate of the first to die is passed in full to the survivor, this essentially means that the IHT liability is deferred until the second death.

Annual gift exemption

One of the most basic ways to avoid IHT is to ensure you make use of the £3,000 gift allowance. £3,000 in assets or cash (or a combination of both) can be gifted annually, either as a single gift or as several gifts adding up to that amount, without incurring IHT. If no gifts are made in one year, or less than the £3,000 amount is gifted, the unused balance can be carried forward to the next tax year.

Small gift exemption

Gifts of up to £250 can be made to as many individuals as you like tax-free, with the caveat that this does not include an individual in receipt of a gift made under the annual gift exemption relief rules.

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Normal expenditure

from income

Regular gifts from after-tax income will be immediately exempt from IHT, providing you are left with enough income after gifting to maintain your normal lifestyle. There is no limit to the size of gifts that can be made under this exemption, subject to these conditions being met. Keeping records will assist your executors.

Payments to help

with living costs

There is no IHT on gifts to help with supporting other people’s living costs, providing the payments are to a former spouse, a relative who is dependent because of age, illness or disability or a child in full time education.

Wedding and civil

partnership gifts

Gifts to someone getting married or registering a civil partnership are exempt, but to qualify must be given on or shortly before the date of the ceremony. The maximum amount is dependent on the strength of the relationship; for parents up to £5,000, for grandparents up to £2,500 and for others up to £1,000.

Other exemptions

Gifts to UK registered charities during your lifetime, or in your will, are exempt from IHT. Gifts to some national institutions such as museums, universities, community amateur sports clubs and the National Trust are included within this exemption, along with gifts to political parties (as long as they have at least two members elected to the House of Commons, or one member elected to the House of Commons and received at least 150,000 votes in the most recent general election).

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Reliefs

Tax reliefs do not provide instant exemption from IHT but do not require a gift of

assets. Reliefs operate to remove the value of assets from the estate for the purpose

of calculating IHT.

Business Property Relief

Some business assets attract significant IHT relief once they have been held for two years. The amount of relief available depends upon the type of business asset and the asset remaining qualifying until the date of death.

There are limits to the availability of the relief; Business Property Relief (BPR) is not generally available where the business consists wholly or mainly of: dealing in securities, stocks or shares, land or buildings, or the making or holding of investments.

For some businesses it is not clear cut whether they will qualify for the relief as this will depend on the nature of the trade, or there may be some restriction of the relief dependent on the assets held within the business.

The rules around BPR are technical in nature and specialist advice should be sought in such cases.

Since the introduction of a more unsympathetic trust regime in 2006, increased focus has been placed upon BPR qualifying assets as a strategy for mitigating IHT. For those in ill health, this is potentially more effective than traditional routes of gifting away assets as the qualifying period of ownership is only two years, compared to gifts that do not fall outside of the estate until seven years after the date the gift was made.

Ascot Lloyd advisers can provide advice on utilising BPR qualifying investments such as: a share portfolio of equities traded on the Alternative Investment Market (AIM) of the London Stock Exchange, Enterprise Investment Schemes (EIS) and Seed Enterprise Investment Schemes (SEIS).

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Assets that qualify for relief:

100% relief is usually available for:

• A business or interest in a business (such as sole trader or partnership)

• Shares in an unlisted company, including shares traded on the AIM

50% relief is usually available for:

• A controlling shareholding in a listed company

• Land, buildings and machinery owned by the deceased and used in a business they controlled or in which they were a partner

• Land, buildings and machinery used in a business and held in a trust that the life tenant of the trust has a right to benefit from

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Reliefs

Agricultural Property Relief

Relief is available on the value of agricultural property, which can include agricultural land, farmhouses and buildings, some woodland activities and agricultural shares. To qualify, the assets need to be owned and used for agricultural purposes for a minimum period. The agricultural property can be owner occupied or let.

To qualify for Agricultural Property Relief, the property must be located in the UK, the Channel Islands, the Isle of Man or the European Economic Area (EEA), and it must be part of a working farm. You must have owned it for at least two years before your death, but if you have let the property out you must have owned it for seven years before your death. The application of Agricultural Property Relief is a very technical area and subject to scrutiny by HMRC. Specialist advice should be sought.

Charitable Gift Relief

An IHT relief was introduced for gifts to charities in the 2011 Budget.

The key features are:

• The relief applies where a deceased person includes a gift to one or more qualifying charities in his or her will; broadly, that means a charity approved by HMRC

• The relief will apply if, at death, the charitable gift (or gifts) amounts to 10% or more of the deceased’s net estate

If, after taking away the NRB, spouse/civil partner exemption and other inheritance reliefs, there is IHT to pay, the tax will be charged at 36% (as opposed to 40%) if the estate passes the ‘10% test’ (i.e. if 10% or more of the net estate, after exemptions and reliefs, is passing to charity).

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Lifetime Gifts

Opportunities for effective planning whilst you are alive are plentiful. The most

straightforward of these is by gifting assets to reduce the value of your estate.

There is no limit to the amount of assets that may be given away. A gift can be:

• Anything that has a value, e.g. money, property, possessions

• A loss in value when something is transferred, e.g. if a parent sells a house to a child for less than its worth, the difference in value counts as a gift

There is no IHT on any gift married couples or civil partners give each other - as long as they live in the UK permanently. However, any gift that does not fall into the IHT exemptions detailed earlier may be considered to be a potentially exempt transfer or a chargeable lifetime transfer. If control is required over any gifted property (including cash and liquid assets), it is advisable to consider a trust arrangement.

Potentially Exempt Transfers

Potentially Exempt Transfers (PETs) are gifts to an individual or to a bare trust where the beneficiary becomes absolutely entitled to the property at age 18. There is no IHT to pay at the time of the gift. After seven years the value of the gift will fall outside the donor’s estate. However, if death occurs within seven years, the PET becomes chargeable. IHT will be due on the PET if the gift amount exceeds the available NRB. The PET utilises the NRB ahead of the death estate.

If there is IHT to pay, this liability can be reduced on a sliding scale if the gift was given between three and seven years before the person died. It may be possible to take out a seven year life assurance policy to meet the cost of the potential tax charge on death within seven years. In the first instance, if a failed PET incurs an IHT liability this is the responsibility of the donee unless the donor specifies otherwise at the time of the gift.

Lifetime Gifts

Chargeable Lifetime Transfers

Most lifetime gifts into trusts are classed as Chargeable Lifetime Transfers (CLTs). Here, tax is levied at 20% (half of the rate applied at death) on the cumulative total of all chargeable gifts in excess of the £325,000 NRB, and is payable at the time the asset is gifted. The transfer is also brought back into account on death if within seven years; however, credit is given for any IHT already paid.

Trusts have their own IHT regime and it is important to seek professional advice on the use of trusts before taking any action.

Gifts with reservation

In order for a gift to be effective from an IHT planning perspective there must not be any benefit retained by the donor, either at the time of the gift or in the future. If there is then it is called a ‘gift with reservation’ and is still counted as part of the giver’s estate for the purpose of calculating IHT. This prevents the situation of a parent giving away a house to children but continuing to live in it rent free.

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If you think these rules

impact you professional

advice should

be sought.

For the charge to bite there needs to have been a gift, sale or transfer of assets, or a cash contribution made. The charge covers land, chattels and intangibles: land has to be ‘occupied’ (including receipt of rents); chattels (pictures, furniture, boats, cars) have to be used or enjoyed, intangibles must have been put in a trust.

Pre-owned Asset Tax

Pre-owned Asset Tax (POAT) is an Income

Tax levied on the value of benefits still

enjoyed in respect of assets which have

been given away; this may be as long

ago as 18 March 1986.

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Pension Schemes

The world of pensions has undergone a significant amount of transformation in recent

years. A pension plan is one of the most tax efficient vehicles, but arrangements need to be

reviewed to ensure this tax efficiency is in place and remains in place. Under the majority

of pension arrangements death benefits do not form part of the deceased’s estate and are

normally exempt from IHT.

Before retirement

Pension arrangements usually provide a lump sum death-in-service payment before retirement that is normally exempt from IHT. The trustees of the pension scheme normally have discretion over the payment of death benefits, but are usually influenced by a ‘nomination of beneficiaries’ declaration made by the member.

After retirement

Individuals now have the freedom to pass on any unused defined contribution pension fund – typically any pension that is not based upon final salary – to any nominated beneficiary when the pension member dies.

There is the potential for pension funds to pass down through generations without ever falling into anyone’s estate for IHT purposes, while remaining invested in a tax advantaged environment. There is no end to this planning; a successor can also pass their remaining funds down to a further successor and so on.

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For more information

on pensions please

see our Pension

Freedoms Guide.

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Life Assurance

Despite having minimised the impact of IHT, for some estates a liability may be

unavoidable. Under these circumstances it is advisable to ensure that the beneficiaries

have sufficient funds to pay the IHT bill.

Life assurance policies written in trust can remove the problem by providing the funds to pay the tax in full, leaving the family to concentrate on other matters and avoid being forced into selling prized possessions.

By choosing an appropriate trust, the sum of money passes free of IHT to the beneficiaries, providing them with the funds to pay the tax due. The premiums are CLTs but can be covered by the regular gifts out of income exemption or the annual exemption. However, the trust (other than an absolute trust) may be subject to a tax charge at each 10 year point, and on exit if the policy has a high value.

Example opposite is based upon:

• The need to make substantial lifetime gifts or significantly restructure investments is avoided

• Life assurance premiums provide an effective method of using the limited annual IHT exemption

• An annual or regular premium policy avoids the need to commit a large lump sum at outset

• There is no qualifying period and the IHT liability should be met in full once the policy has been underwritten (a matter of weeks)

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Loan Trusts

Loan trusts have the effect of freezing the value of assets and allowing growth to

accumulate outside of the taxable estate. They include an option to take ‘income’ and,

if necessary, access capital in the future.

For many years, loan trusts have been the most straightforward planning solution for anyone who needs to retain access to capital, and who may require income but wishes to manage the IHT impact on the future growth value of their estate.

The strategy first requires an appropriate trust, into which the settlor (the person establishing the trust) makes an interest-free loan to the trustees, which is repayable on death or on demand. The trustees subsequently invest the loaned monies into an investment such as an investment bond and

all growth on the bond is outside the estate. The settlor can receive an ‘income’ by means of regular loan repayments from the trust.

As the proceeds are held in an investment bond, regular withdrawals from that bond of up to 5% of the amount invested may be taken with tax deferred for 20 years, or until the investment bond is cashed in. The trust assets can be invested according to the wishes of the trustees. This could be a conservative fixed interest or cash strategy, or into a wider, more diverse multi-asset portfolio.

Loan from the investor inside the estate

Growth outside the estate

INVESTMENT BOND WRAPPER

Loan capital

5% tax deferred withdrawals available

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Discounted Gift Schemes

Discounted gift schemes are lump sum arrangements which usually involve an investment

into an investment bond held in trust, where the settlor (the person establishing the trust)

retains the right to receive regular income withdrawals, but the capital is gifted to chosen

beneficiaries although it cannot be released until the settlor’s death.

As the settlor is retaining some rights to the gift, HMRC should allow the value of the gift to be ‘discounted’, thus reducing the IHT charge. Scheme providers will usually determine the level of discount at the outset based upon the life expectancy of the settlor on review of medical evidence of their health.

The trust options

A discounted gift scheme can be set up using either a discretionary or a bare trust. The main differences between the two are:

• A discretionary trust gives the trustees a discretionary power of appointment, therefore they can benefit anyone from the classes of potential beneficiaries; a gift into a discretionary trust is treated as a chargeable lifetime transfer for IHT purposes

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• A bare trust allows the settlor to name the beneficiaries who will benefit from the trust following the settlor’s death, and once the selection is made it cannot be changed. If one of the beneficiaries dies, their rights form part of their estate and pass under the terms of their will or the laws of intestacy. In these circumstances, the settlor has no control over who eventually benefits from the trust; a gift into a bare trust is treated as a potentially exempt transfer

Example above is based upon:

• Male

• Aged 65 next birthday

• £1 million investment

Gift from the investor falls out of estate after seven years

Growth outside the estate

INVESTMENT BOND WRAPPER

Discount £540,968

(not liable to IHT)

Gift £450,032

(taxable if death occurs within seven years)

5% tax deferred withdrawals available

Example of a bare trust:

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Which Trust?

This flow chart may be useful in determining which trusts to consider. As

always, we would strongly recommend that independent legal and financial

advice is sought and this graphic is used purely for information purposes only.

Yes

YesYes No

Do you know exactly who is to benefit and in what proportion?

Do you want to retain full access to your capital but give away any potential growth to reduce your IHT liability?

Loan scheme

absolute trust

Loan scheme

discretionary trustWill trust

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No No Yes

Yes

YesNo

Yes

Do you know exactly who is to benefit and in what proportion?

Do you want fixed regular payments for life but give away the capital now to reduce your IHT liability?

Which is the most important to you?

Yes

No

Are you prepared to lose access to both your capital and any potential future growth?

Do you need regular payments from and complete access to your capital for life?

Do you know exactly who is to benefit and in what proportion?

Gift scheme

absolute trust

Gift scheme discretionary

or flexible trust

Discounted gift scheme

absolute trust

Discounted gift scheme

discretionary trust

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Important Notes

• Both the issues and proposed solutions are generic and this guide does not constitute investment advice for the purposes of the Financial Services and Markets Act 2000.

• The value of your investment can fall as well as rise and you may not get back the full amount invested. Past performance is not an indication of future performance.

• Levels and bases of, and reliefs from, taxation are subject to change and their value depends on the individual circumstances of the investor.

• Some strategies may involve investment bonds which will be subject to setup charges and additional penalties in the event of early encashment.

• Many strategies rely upon a complicated structure to calculate returns. If any products are put in place you should read the key features document carefully and ensure that you fully understand the structure of the product.

• Where an investment is written in trust, the proceeds will be payable directly to the trustees who will deal with the proceeds in accordance with the trust deed. This may affect your future access to the funds invested.

• Normally, IHT must be paid within six months from the end of the month in which death occurs. After that, interest, currently 3% a year, is charged. If, after twelve months, the IHT remains outstanding, penalties starting from £100 will be imposed. As certain assets can be difficult to value until a sale has been negotiated, for example property, the IHT bill may be paid in instalments over a ten year period. However, interest is charged to the outstanding bill.

• The figures provided in this guide are relevant to the 2018-19 tax year.

There are various ways in which you can limit your IHT liability. It is important to explore all available options to ensure you make the most of the benefits that can be gained from tax reliefs and allowances. An Ascot Lloyd adviser can help you to explore the opportunities available to you.

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providing a personal and professional service to

both individual and corporate clients.

Since we began our journey in the 1930s, our focus

has been to alleviate the burden of financial planning

and put in place the foundations to build strong

financial futures for our clients. We believe that

knowing your financial future and plans are sorted

means that you can really enjoy your life.

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with the whole company so no matter who you speak

to at Ascot Lloyd, you get the same quality service and

professionalism from people that you know and trust.

With you every step of the way

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