Scottish Equitable International (SEI) has produced an inheritance tax (IHT) planning kit for interm...
Scottish Equitable International (SEI) has produced an inheritance tax (IHT) planning kit for intermediaries to use with their clients.
By 2009 the group estimates that 3.6 million people will be potentially liable to IHT, up from 2.1 million in 2002.
The packs, designed to make the IHT planning process simpler, consist of a series of stages which advisers can run through to establish if their clients have a potential IHT problem. The packs can then be used to develop a trust solution to meet each client's circumstances.
The first stage highlights if a client's estate is in excess of the nil rate band of £275,000, allowing the adviser to then advise the client that they should consider IHT planning in order to safeguard the value of their assets for their beneficiaries. IHT is currently charged at 40% on any assets exceeding the nil rate band.
The second stage asks a succession of questions that help to determine what the client wants to achieve for their beneficiaries. The adviser can then take them through a decision tree, identifying the options available to help reduce potential IHT liability. Finally, the adviser can run through the benefits of investing in an offshore bond and decide which type of investment is best suited to the needs of the client.
SEI believes rising house prices and strong equity returns in recent years mean an increasing number of individuals will potentially be caught out by IHT.
Steve Whalley, head of marketing at the business, said: "There has been plenty of media coverage recently surrounding the increasing need for IHT planning. The current threshold has not risen in line with property prices meaning many now face an IHT liability on their death. Recent research shows that while average house prices rose by 142% between 1997/1998 and 2005/2006, the IHT threshold increased by just 28%."
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From 6 April 2019
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