Estate Planning
What makes whole of life cover so powerful is that it creates a known solution to an unknown problem. While none of us can predict when we’ll pass away, many of us can forecast the financial consequences that will follow.
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Unlike ISAs or pensions, investment bonds are not commonly discussed at dinner tables or cited in mainstream financial coverage. But for many investors, they offer a tax-deferral mechanism that, when paired with careful planning, can significantly shape long-term outcomes.
What makes AIM especially relevant to inheritance tax planning is that many of its listed shares qualify for Business Relief (BR). This is a powerful exemption under UK tax law that allows certain business assets — including AIM shares held for at least two years — to be passed on free from inheritance tax.
The nil rate band and residence nil rate band exemptions determine how much of an estate can pass tax-free to beneficiaries. While the nil rate band has been fixed at £325,000 since 2009, the residence nil rate band adds an additional allowance when a home is passed to direct descendants, subject to certain conditions.
A will answers one of the most important questions in estate planning: what happens to everything you’ve built—your assets, responsibilities, and personal wishes—when you’re no longer here to make those decisions yourself.
Introduced to protect businesses from the disruption of inheritance tax, BPR ensures that family-owned enterprises and certain business investments can be transferred to heirs without triggering excessive tax liabilities.
Estate planning is often misunderstood as a process solely for drafting wills or distributing assets after death. However, it plays a far more significant role within the framework of wealth management, serving as a tool to safeguard assets, optimise financial structures, and ensure wealth is transferred efficiently across generations.
When structured correctly, life insurance provides tax efficiency, liquidity, and long-term financial security, making it a crucial component of a well-rounded financial and wealth management strategy.
Inheritance tax is a tax levied on the estate of a person who has passed away. It applies to the total value of their assets, including property, savings, investments, and personal belongings. The standard rate of inheritance tax is 40%, and it is applied to the portion of the estate that exceeds the inheritance tax threshold.
For married couples, the rules surrounding inheritance tax in the UK include several allowances and exemptions that can make a significant difference. However, to fully benefit from these provisions, careful planning and attention to detail are essential.
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Note: This page is for information purposes only and should not be considered as financial advice. Always consult an Independent Financial Adviser for personalised financial advice tailored to your individual circumstances.