Tax efficient investments are far and few between, which is why it is important to take full advantage of them. With the tax year end fast approaching, ensuring your clients make the most of their annual ISA allowance will no doubt be on your mind. However, have you stopped and thought about how to make the most of the annual exemption for Inheritance Tax (IHT)?
The annual exemption for IHT is £3,000 and if the exemption is not used, it can be carried forward for one year only, and would allow a gift today of up to £6,000. This means that couples making joint gifts could potentially give away up to £12,000 in this tax year, free of IHT.
Does making use of the annual IHT exemption normally consist of writing a yearly cheque to the children or grandchildren?
Why not use annual gifting as a means of building up a nest egg for loved ones? The annual £3,000 exemption could be placed in a trust and invested for a beneficiary. Standard Life’s Gift Plan, used with the onshore investment bond, can hold such gifts and allows for yearly increments like a regular savings plan.
As part of your planning discussion, IHT108 is a new sales aid that you can use with clients. Don't forget that you can also use the Gift Record form (IHTS3) to record lifetime gifts for the purpose of any HMRC audit trail.
For more information on Estate Planning, you can visit our dedicated web page on adviserzone or speak with your account manager.
Any reference to legislation and tax is based on Standard Life’s understanding of United Kingdom law and HM Revenue & Customs practice at the date of production. These may be subject to change in the future. Tax rates and reliefs may be altered. The value of tax reliefs to the investor depends on their financial circumstances. No guarantees are given regarding the effectiveness of any arrangements entered into on the basis of these comments.
Links to other newsletter stories
Absolute Return Funds with Graham Dow
Do you have corporate clients who currently own an investment bond?
Defaqto shine spotlight on Standard Life
Discretionary Trust now available
Make sure you don't miss the deadline
Standard Life's Preliminary Results 2008
Standard Life's Savings & Investment Index survey
Barclays Structured Products available via International Bond
• adviserzone
• Techzone
• askTECH
• The Cutting Edge
• S&I News archive
Tell us what you think of our newsletter.
Give feedback here
•click here to update
[Important Legal Notice][Cookie Policy]
Please note that adviserzone features UK and offshore products provided by Standard Life Assurance Limited and other subsidiaries of Standard Life plc. Click here for a list of product providers.
Standard Life Assurance Limited (SC286833) is registered in Scotland at Standard
Life House, 30 Lothian Road, Edinburgh EH1 2DH and is authorised and regulated
by the Financial Services Authority. 0131 225 2552. Calls may be recorded/monitored.
© 2009 Standard Life.
