Pension Practitioner
The SSAS Experts
10
DEC
2015

Don’t lose double the money: working around unfair inheritance taxing

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If you aren’t familiar with the idea of Generational Inheritance Tax, then you need to be. If you have a traditional will, you could be haemorrhaging money due to Generational Inheritance tax, but it’s okay, there are ways around it. Let us break it down for you:
With a traditional will, after your death, the money passes to your spouse, and when they die, to your kids. When this occurs, your children will pay inheritance tax on the money left to them. If we assume that they have a similar will in place, upon their death your grandchildren will pay the same rate of tax, on that same money.
This is a crafty little scheme from the tax man, and means they get to tax your money twice! You could just put up with this loss, or you could do something about it, and the best way is with a simple trust.

If you put things into a trust then they no longer belong to you. This means that when you die their value normally won’t be counted when your Inheritance Tax bill is worked out.
The trustee is the person who technically owns the assets in the trust. It’s their job to manage the trust responsibly. The beneficiary is the person who the trust is set up for and they will get the benefit of the money, property or investments.
You can create a trust in conjunction with your will, naming your children and grandchildren as beneficiaries of the trust. In this way, the money is not ‘passed down’ as such, but is available to the beneficiaries under whatever terms you dictate.
It’s important to make yourself aware of the realities of inheritance tax – even though you might not want to think about what happens to your money once you’re gone, the reality is that SOMETHING will happen to it, so you may as well make sure it’s what you want.

Trust law is complicated. To make sure you get things right, it’s vital to get professional advice before setting up a trust. Always talk to a solicitor or an estate planner . For any guidance on your SSAS Pension Scheme , Asset protection and Inheritance Tax , get in touch with our friendly team of SSAS and Asset Protection experts, we’d love to help.

davidn@pensionpractitioner.com

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