Inheritance Tax planning – and keeping your affairs in order

23 October 2017

One of the advantages of carrying out probate and estate administration work is that we get to see both sides – we help clients to plan their affairs to reduce potential Inheritance Tax liabilities and to deal with succession issues, and we are there to see the results.

Typically, of course, it all goes well but we do come across problems that could be avoided with a little bit of forethought. These include:

  • Leaving it all too late. Sometimes, of course, people die young and it is understandable that they have yet to give real thought to Inheritance Tax and succession issues. However, postponing any real tax planning until you are in your 80s must inevitably reduce the chances of success.
  • Not having an up-to-date Will. It is clear to us that, if you have significant assets or complicated affairs (or just a complicated family), you should take proper professional advice and have a Will drawn up. Moreover, that Will should be reviewed periodically – we would suggest at least every 5 years – to ensure that it continues to reflect your circumstances and those of your family and that those appointed as your executors continue to be the right people for the role.
  • Not thinking about overseas assets. If you own assets in other jurisdictions these will not necessarily pass in accordance with your English Will. Take legal advice on this, particularly in respect of overseas properties.
  • Not talking to friends/family. Your named executors do not have to accept the appointment – they can renounce. Try and avoid this possibility by telling them why they have been chosen and talking through any possible issues. If you expect that your Will could give rise to family arguments, try and forestall these by explaining things face-to-face or, failing that, in a side letter to your Will. If conflict seems inevitable, choose some robust, and perhaps independent, executors.

Lastly, while not related directly to either Inheritance Tax or succession planning, we would emphasise the importance of keeping your affairs in relatively neat order. Ensure that your immediate family will have quick access to cash should something happen to you and try and make it easy for them to find the information they will need to sort out your affairs and, if necessary, to apply for probate.

To help with this last point we have produced a Personal Affairs Checklist (“PAC”) that can be found on our website by clicking the link at the foot of the page here. This form can be printed off and completed by hand or filled in on-screen before being printed off or saved electronically. This is not a formal document and is in no way a substitute for a Will, but we hope that it is something that you find helpful.

For further advice on Inheritance Tax and succession planning generally, the drafting of Wills, executorships, probate and estate administration, speak to your usual UHY Hacker Young contact or use our contact form here.