Avoiding inheritance tax

How to pass more money to your family

We put in place a programme to allow a couple to pass on assets to the next generation in their family; this helped them to save inheritance tax, while providing reassurance that their own futures were secure.

“When planning my financial commitments and requirements I wanted to discuss my needs with someone I knew I could trust. Woodruff Financial Planning was able to explain the various options and I found their advice and insight professional and thorough. I was able to trust Woodruff Financial Planning’s advice and have no hesitation in recommending their services to anyone.”

Damian Culhane – Financial Advice client

Background

We highlighted that our clients had too much capital for their needs and were in danger of paying inheritance tax at 40% on their death. They asked us to recommend flexible solutions to legally and safely avoid inheritance tax, whilst retaining the right to receive an income from their assets.

Problems/Challenges

Security and control

Their primary concern was security in their future. They did not want to give away money if they would need it later.

Risk

They wanted to avoid tax, but not if this meant that there could be potential implications later on.

Our approach

Calculated how much they needed

We showed them the amount needed to secure their desired future lifestyle.

This gave them the confidence that they had too much money for their own needs no matter what happened in the future.

Seeing the benefits

We established that it was better for them to see the fruits of their money while they were still alive, rather than to give it away after their death. That way they could see their money in action, used to help their children and grandchildren.

We agreed a programme of gifts over time to various family members and charitable institutions. This made use of available exemptions with the aim of giving away their excess capital without fear of running out of money.

With the remainder of their estate we were able to recommend a variety of flexible solutions which would enable them to avoid inheritance tax over time whilst still retaining access to their capital should they need it and also giving them a sustainable income.

Outcomes and Impact

Security preserved

They first made sure that they retained control over their assets and income and made sure that their standard of living would not worsen.

Seeing their money helping their family

The clients were able to help a number of family members financially from their excess assets. This meant that they had the enjoyment of seeing their money being usefully employed by their family whilst they were still alive.

Tax savings

They were able to make significant tax savings through a combination of gifts and other solutions designed to pass more assets to their family after their death.

Continuing Support

Each year we revise their financial plan so that we can react to any changes and re-assess whether they remain on target to meet their long-term goal of security.

We also examine their investment portfolio and aim to keep it on track towards its goals while taking the least risk needed to do so.