Services for personal clients

Capital gains tax and inheritance tax planning

If you have worked hard to build up assets to give you financial security in retirement – and financial peace of mind for the people you care about when you are no longer around – seeking professional, expert advice is essential.

Our tax specialists can advise on all aspects of inheritance tax (IHT) and capital gains tax (CGT), to help you minimise your liabilities.

IHT is usually paid when somebody dies if their estate – including gifts made within the seven years prior to death and some assets held in trusts – is valued over the IHT nil rate band, which has been set at £325,000 until 2015.

Rising property prices have made more people vulnerable to IHT, which is paid at 40 per cent on anything above the £325,000 threshold. Married couples and civil partners can increase the threshold on their estate when the second partner dies to as much as £650,000 by transferring the first partner’s unused nil rate band to the surviving partner on their death.

Other options for reducing IHT liability are available, including certain gifts, so it makes sense to put in place careful IHT planning and a tax-efficient will to ensure that your family, not the taxman, inherits on your death.

CGT is charged whenever you dispose of an asset, whether this is through a sale or a gift, with individuals each having an annual exempt amount on which no tax is levied (£10,600 for the 2011-12 financial year).

For gains on or before 22 June 2010, CGT is levied at a flat rate of18 per cent. After that date, the 18 per cent rate continues to apply to basic rate taxpayers but higher rate taxpayers pay CGT at 28 per cent.

However, entrepreneurs’ relief on the disposal of a business effectively reduces the CGT rate to ten per cent on gains accumulated during the taxpayer’s lifetime. The relief also applies to gains on disposals of certain shares and assets associated with a qualifying company. For disposals made on or after 6 April 2011, the lifetime allowance is £10 million.

Our team of tax specialists have an in-depth understanding of the complex rules around IHT and CGT and can provide solutions tailored to suit each client’s individual circumstances, which can range from the straightforward to the highly complex. We can advise on issues including:

• drafting a tax-efficient will
• gifting assets
• pre and post-death tax planning
• using available allowances, exemptions and reliefs to maximum benefit
• using capital losses to mitigate tax on gains elsewhere
• using inheritance tax-efficient investments
• using trusts to mitigate tax.

For more information on how we can help you, please contact us.