Independent financial advice on passing on wealth

Passing on your wealth to loved ones can be an intricate but ultimately rewarding endeavour. Our independent Wealth Planners can iron out the complexities for you and devise a comprehensive wealth strategy to make sure you leave more of your wealth to your loved ones (not the tax man). They can help to ensure your wishes are honoured without unnecessary expense or delay.

Passing on wealth — here’s how we can help

While passing on wealth can be rewarding, you may also find it complex. Our Wealth Managers have the expertise and, importantly, the independence to advise you on the best way forward.

Your dedicated personal Wealth Planner can:

• Review your current financial situation and help you decide the best way to pass on wealth
• Take you through a cash flow planning exercise and let you know how much you can afford to give
• Consider the rules and amounts you can give with regards to inheritance tax
• If you decide you want to invest in your legacy, Wealth Planners can build a diversified investment portfolio suited to the needs of your loved ones
• Review your plans on a regular basis and make adjustments as and when needed.

How to pass wealth to your heirs

The simplest way to pass your wealth to your heirs is to speak to a Wealth Planner who will help you prepare for every eventuality and advise you on the actions you can take to ensure your wealth is transferred in the most efficient and appropriate way. For example:

• Making a Will – without a Will, your estate will be shared according to a set of rules and this can differ greatly from your wishes and devastate those you leave behind
• Gifting from any excess income you have during your lifetime – while gifting can be an effective strategy, there are many important considerations to ensure gifts stay exempt from tax
• Investing tax efficiently – investment assets that benefit from Business Relief are exempt from inheritance tax; however, they are typically high risk so may not suit everyone
• Using trusts – a trust structure can help with private education costs or future property purchases.

Gifting wealth during your lifetime

If your Wealth Manager recommends gifting wealth or assets to your loved ones as a suitable strategy, it’s helpful to start sooner rather than later, as the inheritance tax clock starts ticking as soon as the gift is given.

Usually, seven years must pass before your gift is 100% inheritance tax free. Should you die before this, the person who received the gift may owe inheritance tax. A benefit of gifting wealth earlier is also seeing those you love enjoy what you have given them.

There are many different ways of gifting wealth, however there are several rules — and often the amount you can give without incurring inheritance tax is capped.

Before gifting any money, we recommend completing a cashflow modelling exercise with your personal Wealth Manager to check how much you can afford to give.

Our inheritance tax planning service can also help you decide when and how to gift your money.

Passing on your pension wealth

Pensions are generally outside the scope of inheritance tax in the UK, so, any remaining pension funds will pass to your nominated beneficiaries when you die. As such, we would typically recommend that pension benefits are gifted after assets that are liable for inheritance tax.

If you die before the age of 75, lump sum payments from your pension will usually be paid to a nominated beneficiary free of inheritance and income tax.

If you die after 75, your beneficiary will still receive the proceeds of your pension fund free of inheritance tax, but they would have to pay income tax at their marginal rate on any withdrawals.

As retirement planning and pension experts we will always check the most up-to-date rules and regulations around passing on your pension and advise you accordingly.

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If you would like to know more about how our independent wealth planners can help you pass on your wealth, please get in touch. We will be delighted to provide more details of our services.