Estate planning is something too many people push to the side. Considering the Chancellor’s Budget, now is the time act. Specialist lawyer Alexandra Milton explains…
There was much speculation in the lead up to the autumn budget around tax rises, pensions “raids” and spending cuts. But regardless of the final detail when announced, this government has signalled that they will urge those with the “broadest shoulders” to help balance the books.
I’ve been advising people on their personal finances and how to protect themselves for more than 20 years. Here are some areas to focus on:
A Will
Get yourself a Will. It’s a central factor to many of the problems that people come to me with.
Inheritance tax
Proper estate planning is essential as it’ll consider the Inheritance tax (IHT) levied against your estate on death. Allowances can be maximised to reduce IHT, however their nuances need careful consideration.
The residence nil rate band
If someone dies and they pass their property to descendants, their estate may qualify for a £175,000 residence nil rate band. But this allowance has strict conditions that need considering. Contact me for support.
Pensions
From April 2027, pensions will attract IHT. From April 2026, business interests, which used to enjoy a 100% IHT exemption, will see a 50% reduction on interests after the first £1m. You must take advice.
Second marriages
A Will trust can ensure that your surviving spouse continues to benefit from your assets whilst protecting the capital for your bloodline.
If your child gets divorced
Leaving an absolute share in your estate to a child pursuing divorce could see their inheritance included within divorce proceedings. A Will can afford protection.
Philanthropy
UK registered charities are exempt from IHT and, if you give them 10% of your estate, then your IHT rate reduces.
Care fees
Care fees can be seen as a 100% “tax” where care fee planning Wills can protect the wealth against the survivor’s care fees but, at the same time, maintaining their standard of living. All of the above have nuances and all need specialist advice and carefully navigating for each individual.
Are your affairs in order?
This article was written prior to the autumn budget
Alexandra is a Private Client Partner at national law firm Knights.
For further detail of the hidden nuances not covered here, please contact alexandra.milton@knightsplc.com
or call 01932 590518
This article appears in the winter edition of Premier Magazine
