How Can I Reduce my IHT Liability?

[sigmund]

Are there any other ways of ACTUALLY reducing liability to IHT other than using PETs, the £3000 annual exemption, the £250 individual gifts to others, gifts out of normal income or spending it? I do not own a business, agricultural land, woodland or AIM shares; neither do I wish to donate to politcal parties, charities or national institutions.

[King_Maker]

Acquire a non-UK domicile in a suitable tax jurisdiction.

[section 44]

In practice I have never ACTUALLY seen this done but if you could achieve immortality then that would ACTUALLY avoid IHT – the ultimate reduction.

[sigmund]

Thank you for your suggestions. People keep going on about using a discretionary will trust, I can see how one might control how the money is used but I can not see how on earth it actually saves more IHT than the steps I originally outlined. Or am I missing something?

[devon]

Immigrate to New Zealand, it’s a wonderful country and there is no inheritance tax.

But have patience as quite a time will need to elapse before you are totally free of the talons of HMRC

[taxmenot]

Hi,

There are several ways of mitigating your IHT bill using statutory reliefs but before looking at this, what is the value of the estate?

[welshtrustees]

The one missing from your list is a SIPP which, like a relevant property trust, is (generally) considered outside your estate and so is not subject to IHT. Since the new rules, there is considerable flexibility as to to whom the benefits may be passed, potentially down multiple generations, with maintained tax free capital gains and income, and with the treatment of benefits actually taken depending on your age at death but worst case the beneficiaries marginal rate of tax.

The problem is getting enough money into it quickly enough; the political risk that the rules will all change again; and being wealthy enough that you do not need it yourself!

[sigmund]

Thanks for your suggestions but as I am already retired the Sipps route does not help. I am looking at reducing IHT on about £1.5M

[IanDarkwater]

As a statement of the very obvious you are talking about a very significant potential IHT bill.

There are options offered by clever people across the entire spectrum from safe to very 'aggressive'. I suggest you pay an expert you trust with lots of PII cover to properly advise you. An accountant can discuss this with you.

I an not an accountant, I write wills, but if you want an introduction to an accountant I can arrange one.