IHT and Succession Planning
In the UK Inheritance Tax (IHT) is often seen as one of the most punitive of taxes as UK residents pay income tax (and CGT) throughout their lifetimes only to suffer further tax at 40% on worldwide assets over the nil rate band when they die. It is relatively easy for non-UK domiciled individuals to mitigate their exposure to IHT however for UK residents the planning requires a little more thought. Details of structures can be found through the onclick below.
Succession planning is utilised for a number of reasons and most often use a trust structure in order that trustees can hold assets in a safe and secure manner for the benefit of future generations. In certain jurisdictions forced heirship rules apply whereby the estate of the deceased has to be distributed by law in certain set proportions to the deceased's spouse and/or children. Certain trust structures can be useful in allowing the individual to express their wishes to transfer assets more freely upon death.
The other main reason for succession planning is in order to preserve assets for future generations and protect hard earned wealth from spendthrift relations. The most common method of achieving this is through life interest settlements or discretionary trusts however more specific circumstances should be discussed directly with one of our business development team.