Chartered Accountants of Poynton, Cheshire

It could be said that the art of IHT planning is to give away as much as possible during your lifetime, while still keeping enough to ensure that you and your spouse can live a comfortable and fulfilling retirement.

The full rate of tax is 40% on the value in excess of £275,000. Taxable gifts made up to seven years before death are added back into your estate and tax is calculated on the inclusive value. But to the extent that such lifetime gifts made between three and seven years before death exceed the tax threshold, the associated tax is discounted by up to 80%.

To enable long-term objectives to be met, it is necessary to start making decisions about your finances and your family now. The earlier you start planning, the better.

What you need to consider

Your assets and your estate

Your 'estate' means everything you own. This will include: your home and land; your business; shares and securities; cash;, savings accounts; antiques; jewellery; and anything else with any value. Any liabilities you have will be deducted, such as: mortgages; overdrafts; loans; outstanding bills and even funeral costs. We can help you to calculate the value of your assets now, and estimate how this value may change over the coming years.

Your financial security

You need to make sure that you and your spouse are properly provided for, particularly in retirement. It would not make sense to give assets to your children only to find that in later life you need to ask for some or all of them back.

Your family's future needs

You need to think about what degree of control you would want your children to have over any assets you may transfer to them. You also need to work out how much your spouse would need if you die first. This would, of course, have to be reflected in your Will. In addition, you need to find out the intentions of parents or elderly relatives about their own assets.