Tax planning is not a service only for the wealthy. Rising property prices mean that without proper planning, most people will fall into the IHT net when they die. That means their loved ones will have to pay a 40% Inheritance Tax on the total net value of assets over £325,000, or £650,000, depending on their marital status. Assets subject to IHT include property, businesses, cash and investments, and life insurance policies not written into trust.
At Soteria Trusts, we are not only concerned about the ‘here and now’ but also for your future and beyond your lifetime.
From 20 – 45% per annum of property rental.
Up to 19% of the residential transaction value.
24% of gains made on property from April 2015. Other investment gains are charged at 20%.
From £4,400 – £287,500 per annum.
40% of value of net estate over Nil Rate Bands (NRB’s) of £325,000 for singles & £650,000 for couples.
IHT is payable on the value of anything you leave behind when you die. The IHT rate is 40% and due on any amount above £325,000 for an individual, and £650,000 for a couple.(including UK-registered pensions and QNUPS from April 2027)
Protecting your wealth is the goal of Soteria’s Tax Planning Service. We will guide you through the planning process and advise you on the best possible solutions tailored to your specific needs. To give you an overview of the Tax Planning Service and its various strategies, we have a checklist of things that you can do to reduce your taxes during your lifetime and after death
The starting point for any Estate and Inheritance Tax plan is to have a Will in place. Not only does it avoid any future family conflict, but an effective Will can also help your beneficiaries reduce the overall tax liability of your estate.
Pensions that meet the criteria of being a registered pension and QNUPS as defined by ‘HMRC’ are currently exempt from IHT following a member’s death. The Trust ensures that the pension assets (your contributions) are kept separate from those of other members and are exempt from CGT once held within the pension.The PCC of a contract based plan achieves the same thing. From April 2027 things are changing and any unused funds within a UK registered pension scheme and QNUPS, will form part of the deceased’s estate and be liable to IHT.
From April 2025, the UK will shift to a residence-based regime for Inheritance Tax (IHT). Currently, UK-domiciled individuals are taxed on all global assets at 40% above the Nil Rate Bands (NRB), while non-UK domiciles pay IHT only on UK assets. Under the new rules, individuals who have lived in the UK for 10 out of the last 20 years (Long Term Residents) will have both UK and international assets subject to IHT. Those who leave the UK after being LTR will remain liable for IHT on non-UK assets for up to 10 years. Non-residents for 10+ years will only pay IHT on UK assets.
Soteria Trusts currently offers four types of trust accounts:
Soteria Lite – A Discretionary Trust which protects assets from creditors, offers members open architecture, contribution flexibility and penalty-free access from day one.
Soteria Flexi Builder Account – A regular saving platform which protects assets from creditors and provides access to a range of low-cost model portfolios, all pre-approved by the Trustee. A flexi builder account provisions for quarterly, half yearly or yearly payments to be made and access to capital without penalty after a short commitment period at the outset.
Soteria Alternatives – Substitute non-freely convertible currencies and acquire international assets in major currencies when using this unique discretionary trust arrangement.
Soteria Business Relief Account – Invest in qualifying UK businesses and receive an IHT exemption on up to £1m of assets after 2 years.
Download Soteria’s Tax Planning Guide for more information and real-life examples of tax mitigation strategies and success stories.
There are certain tax allowances you could use to reduce the value of your estate and the IHT bill. For example, if you pass on a home to your spouse or civil partner, there is no IHT liability, but if you leave it to another person who is not a direct descendant, then IHT will apply.
Another tax allowance that can decrease your estate’s value, and IHT as a result, is an allowance for gifts of up to £3,000 each tax year. Gifts exempt from IHT can include cash, property, valuable possessions, such as jewellery or art. Gifts don’t count towards the value of your estate after seven years.
Corporate structures are often set up to hold assets such as physical property and can reduce certain personal taxes, such as Income Tax and Capital Gains Tax. Corporate structures, such as UK and offshore limited companies are not effective when it comes to IHT. If you already hold assets in a corporate structure they may not be as tax efficient as you think. Contact us for a review of your holdings, and we can advise on the most efficient ways to legitimately reduce your IHT liability.
The rules surrounding IHT are complex and changing all the time and there is no one solution that fits all. As everyone’s circumstances are different, we recommend seeking advice from a professional tax adviser or financial planner who understands IHT and the complexities around efficient and robust Estate Planning. Contact us for a free consultation today.
Download this guide for more information about tax liabilities for non-UK residents.
Please complete the details below or contact us at info@soteriatrusts.com
