tax year estate planning

End of the Tax Year – Review Your Estate Planning!

It will soon be the end of the tax year and an opportune moment to review your Estate Planning.

Does your Will need updating?

Have the circumstances of any of your beneficiaries changed? Could there be a better way for them to inherit your estate? Are you making Money Bequests? Would a percentage of residue be more appropriate?

Do you have a digital assets record?

It’s a good idea to review the assets and information you hold digitally in online accounts. Store your logins and passwords securely and ensure the executors can access them after your death, along with instructions on how to administer your online accounts.

Do you have “Death in Service” benefits?

Have you considered paying any “Death in Service” benefits into trust? This might reduce Inheritance Tax in the years ahead. If so you may wish to set up the trust in your lifetime ready to receive the “Death In Service” benefit. You will need to change the nomination form.

Have you set up Lasting Powers of Attorney?

It’s a safeguard that will give you peace of mind. A Lasting Power of Attorney lets you appoint the people you want to make decisions on your behalf about your “property & finances” and also your “health & welfare” if you are no longer able to make them yourself.

Are you using normal expenditure out of income exemption?

The ‘normal expenditure out of income’ exemption is an effective way of reducing inheritance tax, so it’s worth making the best use of it. As long as you meet the exemption conditions, the lifetime gifts you make will be exempt from inheritance tax, and there’s no limit on the gift amounts.

Do you have assets abroad?

If you own property outside the UK, it might be affected by local succession issues and inheritance laws – in which case you could need a separate Will for that jurisdiction.

Do you still have the optimum trust arrangements?

The trustees should review your trust investments, decide what to do with the trust’s income and capital, and complete the tax returns for the trust. It may be possible to improve your trust arrangements, by setting up an extra trust as part of your estate planning.

Have you thought about writing your life insurance policies under trust?

Specifying that you want your life insurance policy proceeds to be paid to a trust rather than your estate means they won’t be subject to inheritance tax on your death. If you put this in a letter of wishes, make sure it doesn’t conflict with your Will.

When did you last look at your estate/tax planning?

You may be able to restructure your estate to reduce the inheritance tax payable on your death, using the various exclusions, exemptions and reliefs. As the end of the tax year approaches, it’s worth thinking about using your £3,000 annual exemption for gifts, if you haven’t already done so. It’s also a good time to update your records of gifts you’ve made.

Will your estate qualify for the recently introduced residence nil rate band?

From 6 April 2017, an additional residence nil rate band has been introduced, reducing the inheritance tax paid when you leave the family home to your descendants. The terms of your Will and how your estate is structured will both affect how much relief can be claimed.

If you would like to meet with one of our Consultants to discuss any of the issues raised in this article or any other Estate Planning topic please telephone 01732 868190 or click here. Don’t delay ~ Act today!

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