Looking to retain some of your assets?
There are planning options available that don’t require assets to be given up fully during your lifetime.
Business Relief (BR)
Investing in assets that qualify for BR (formerly Business Property Relief), provides relief from IHT on the transfer of relevant business assets at a rate of 50% or 100%. The 50% rate applies to land, buildings or machinery used in a business owned by you, if you control or are a partner of the business. It also applies to shares giving more than 50% voting control in a listed company. The 100% rate applies to an interest in a qualifying business and shares in an unlisted trading company. Relief is only given if you owned the business or asset for at least two years before death.
Click here for more information on BR.
Discounted Gift Trust (DGT)
Using a DGT allows you to put a lump sum into a trust for your beneficiaries, while retaining the right to regular payments. A DGT may therefore be useful if you require the ability to still benefit from the income but want to exclude assets from your estate. You’d need to survive for seven years after the transfer to prevent an IHT charge, and unless structured as an absolute/bare trust, the discounted value transferred will also need to be under your available Nil Rate Band to avoid a lifetime IHT charge at a rate of 20%.