When faced with a terminal illness, here’s how to escape the sting of Inheritance Tax.
Sandro Forte, a financial expert, discusses how to safeguard your family’s assets.
When a loved one has a short life expectancy or is suffering from a terminal illness, finances are naturally one of the last things on anyone’s mind.
It is, however, an unwarranted blow to that person’s legacy, which can be readily prevented by preparing ahead.
After all, wouldn’t you want to do everything you can to safeguard the money and assets that your loved one worked so hard to accumulate?
“There may come a point, generally with the diagnosis of a terminal illness, when the timetable for the remainder of our life becomes apparent,” Sandro Forte, co-owner of Frisk and managing partner of Forte Financial LLP, says.
“As a result, the likely IHT (Inheritance Tax) payable on our death can be computed with greater accuracy, as can the amount that could be securely given away.”
“On the other hand, the circumstances that bring such assurance may make our prospects of surviving the seven-year period required for the value donated to fall out of account for IHT purposes next to nil.”
“However, there are a slew of possible last-minute tax preparation alternatives.”
If an estate is bequeathed to a long-term partner, there will be an IHT charge after death and then again when assets are passed down to children, for example.
If a marriage happens, however, the inheritance will transfer to the spouse tax-free (known as the spouse exemption), even if death occurs mere days after the marriage.
Invest in assets that qualify for IHT exemption.
After two years of ownership, certain enterprises and agricultural assets are eligible for 100% IHT exemption. This is something to think about if surviving the two years instead of the normal seven seems doable.
There are a variety of investment options that qualify for relief, but according to Sandro, it’s critical to get professional guidance because the attractiveness of the relief must be balanced against the level of investment risk that must be accepted.
Make presents to reduce your estate’s value to less than £2 million.
People have previously ended up on the IHT web just because they were looking for “Brinkwire Summary News.”