For many clients Inheritance Tax is a very unjust tax. Having worked, saved and invested in order to pass it on to their families and loved ones the idea of losing up to 40% of their estate is simply wrong!
We specialise in providing inheritance tax planning and advice to help clients reduce the impact of Inheritance Tax. Using our expert knowledge of trusts combined with our approach to investments we assist the transfer of wealth from generation to generation for our clients.
There are various ways of reducing Inheritance Tax from making regular gifts out of surplus income through to sizeable gifts into trust. Northern Star can provide advice and planning on all of these.
There are popular tax planning strategies for reducing the impact of Inheritance Tax such as…
- Loaning to a trust, which has the effect of capping the Inheritance Tax liability for the loan, as any investment growth belongs to the trust and is subsequently out of the estate.
- Gifting to a trust, using a Discounted Gift Scheme, clients can make substantial Inheritance Tax reductions whilst retaining an income from their investments.
- There is also gifting using regular surplus income, providing it is income and doesn’t affect the day to day living, such gifts could be used to set up pensions for children/grandchildren or investing in trust for school/college fees.
- Regular income may also be used to provide life insurance, which when placed in trust can be used to either pay any Inheritance Tax or create a secondary estate. Creating a secondary estate means clients are then free to spend some of their money safe in the knowledge that they have left an Inheritance Tax friendly legacy for their families.
Inheritance Tax planning needs clients to be proactive, and we work alongside solicitors and estate planners to make sure that our clients are provided with a very professional service and always receive the very best Inheritance Tax advice.
The UK tax system is notoriously complex, but the benefits of structuring your finances tax-efficiently can be huge. We can help you to do this while ensuring you are making the most of the available allowances, so you won’t pay any more tax than you need to.
Using Your Tax Allowances
The Government gives you various tax allowances and reliefs each year – and making the most of them can save you a lot of money. We can structure your finances to ensure you are making the most of your allowances, including those for Income Tax.
Income tax is banded depending upon how much earned and/or pension income.
| Pension: | 0% Tax |
| Basic Rate: | 20% Tax |
| Higher Rate: | 40% Tax |
| Additional Rate: | 45% Tax |
Sometimes, even after everything is done there is still tax to pay – it could be a badge of honour….
To find out how much income tax you have to pay, what income is completely free of tax and how to calculate your tax bill.
We provide you with independent advice on structuring your finances tax-efficiently. This includes Capital Gains Tax.
Capital gains is a tax charged on profit when you sell or ‘dispose of’ an asset that has increased in value. Disposing of an asset can include giving it away or swapping it for something else.
Capital gains tax is charged at 10 or 20% tax on profit above your personal allowance. Or higher if the gain is from a property that isn’t your home – this is taxed at 18% or 28% tax.
We provide you with independent advice on structuring your finances tax-efficiently. We help you to plan your finances and create a bespoke strategy for your ‘wealth health’.
Tax Planning is an activity conducted by the taxpayer to reduce the tax liable upon him/her by making maximum use of all available deductions, allowances, exclusions, etc. feasible under law. In other words, it is the analysis of a financial situation from the taxation point of view.
Here are some of the various methods of tax planning:
- Short-range tax planning. Under this method, tax planning is thought of and executed at the end of the fiscal year.
- Long-term tax planning.
- Permissive tax planning.
- Purposive tax planning.
Tax planning is the process of analysing a financial plan or a situation from a tax perspective – but we always put you, your family and your lifestyle as the focal point. The objective of tax planning is to make sure there is tax efficiency. With the help of tax planning, one can ensure that all elements of a financial plan can function together with maximum tax efficiency.
We are here to help, guide and ensure you are both legal and not paying too much tax. Contact us to discuss any/all your tax-related financial planning.
Dave Stark
