The backgound

Paul and Angela had built up a portfolio of five rental properties. The properties had grown in value and caused concern over the potential inheritance tax liability. With three children, they wanted to ensure they passed on their wealth as tax efficiently as possible.

In addition, they were no longer enjoying managing the property portfolio and wanted to consider their options.

What we did

We spent a considerable amount of time understanding exactly what Paul and Angela wanted to achieve, not just in relation to the properties but also considering their desired lifestyle, both for themselves and their wider family.

We implemented a financial planning strategy that made best use of gifting and trusts, in order to reduce future inheritance tax liabilities. The strategy also enables them to manage more effectively the capital gains tax liability that would arise on the sale of property.

What we achieved

They now have no capital gains tax liability on a number of the properties. Providing they live for another seven years after implementation of the plan, we will have reduced their inheritance tax liability by 65%.

They still have access to capital and income if they need it, whilst the properties will be available to provide for the children and grandchildren in the future. A life insurance policy placed in trust means that the reduced amount of tax liability on death will now be covered, without reducing the value of the estate.

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