Inheritance Tax is still an underestimated problem in the UK.

We probably all know whether our worldly assets are worth more than £325,000 but my guess is that a lot of people still do not appreciate the implications.

If your estate is liable to inheritance tax then that comes in the form of a tax bill courtesy of HMRC. This needs to be paid in cash and your beneficiaries, who may well be your children, will have to find the money. That is not always so easy. For example, if your house is the major asset that you have left behind then turning that into cash quickly enough to pay the tax bill on time will be an emotional roller coaster, which could lead to it being sold at a lower price than it perhaps could be.

All of that at what would naturally be a difficult time anyway is not a nice situation to be in for anyone. When you think of leaving behind your hard earned money and assets, think through carefully what you are really leaving behind in terms of stress and administration.

It would simply be far easier to leave behind an estate that is already set up to be passed on without having to worry about any of the issues highlighted above. Planning in advance to avoid inheritance tax can be done quite easily with a few simple steps. There are some more complicated options too but as with any form of financial planning it will really come down to your individual requirements.

Some of the options you could look at include:

  • Do nothing
  • Annual allowances
  • Life Assurance
  • Potentially Exempt Transfers
  • Discretionary Trusts
  • Discretionary Will Trusts
  • Discounted Gift Trusts
  • Small Company Portfolio
  • Agricultural Property
  • Gifts to Charities

Investor Profile has produced a detailed report considering each of these options and how they may be used by you to help you avoid inheritance tax.

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Blog by Jaskarn Pawar

Jaskarn Pawar is an experienced and award winning Chartered and Certified Financial Planner. He advises people all over the UK on financial planning and wealth management issues to help them reach solutions to fit their personal needs. You can contact Jaskarn on 01604 211234 or by e-mail on