Genus Financial & Estate Planning

03/11/2023

14/08/2023

UK Inheritance Tax exemptions

Would your estate be able to utilise any of the UK Inheritance Tax exemptions?

Earlier this year, significant changes were made to the Inheritance Tax (IHT) regulations. These amendments mean that more estates will be considered exempt from IHT, and therefore fewer people will need to file estate returns in order to be granted probate.

The amendments were made to the Inheritance Tax (Delivery of Accounts) (Excepted Estates) (Amendment) Regulations 2021 and are applicable to deaths in the UK from 1st January 2022 onwards.

As can be expected, there are specific criteria an estate needs to meet in order to be considered exempt.

The Nil Rate Band
The nil rate band (NRB) is the threshold that determines whether an estate will be subject to IHT. Currently, the NRB is £325,00, meaning that no one will have to pay tax on the first £325,000 of their estate. If the total value of someone’s estate is below that figure, there will be no IHT to pay.

The Residence Nil Rate Band
The residence nil rate band (RNRB) applies to deaths that happened on or after 6th April 2017. This tax relief could apply to cases where a person passes away, and their estate is above the NRB; it makes it possible for people to not have an IHT bill.
To qualify for the RNRB, a person has to leave their home to their direct descendants (who might be their children, step-children or grandchildren). For the tax year 2021/2022, the RNRB is set to £175,000 for estates under £3 million.
For many, the RNRB helps keep their estate’s total value below the taxable threshold. However, the application process can be complex. We highly recommend that you seek professional advice if you’d like to utilise this exemption.

Lifetime Gifts
IHT exemptions are also available on gifts you make during your lifetime.
Should you gift assets to your spouse or civil partner, there is no IHT to pay as long as they live permanently in the UK. You can also gift to charities or political parties without paying IHT.
There is a yearly allowance for gifting assets free of an IHT charge. You can give away £3,000 worth of money or gifts to one individual or split it between several. There is also a small gift allowance available whereby you can gift up to £250 per person each tax year (provided you haven’t already given them money from another allowance). These small gifts must be made regularly, such as a birthday gift.
Similarly, regular payments that you make to help someone else with their living cost can also be considered exempt from IHT. This is only the case if you can still afford to pay your own usual living cost and if the money is paid from your regular monthly income, so do not tap into your savings, for instance. You might put away savings for children each month or help to pay bills for a child or elderly relative.

Finally, you should be aware of the seven-year rule, which means that no IHT is due on any gift you make, providing you live further a further seven years. If you gifted an isolated amount of money to your child but died within seven years, that money would still be included in your estate for tax purposes.

With all of the rules in place, Inheritance Tax planning can get complicated. If you would like professional support in this area, our team is ready and happy to help you.

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26/07/2023

The Power of a Family Trust: Safeguarding Your Legacy.

In today’s ever-changing financial landscape, establishing Family Trusts has become an essential tool for preserving wealth, ensuring financial security, and safeguarding one’s legacy for future generations. As families navigate the complexities of the UK’s financial regulations, a Family Trust offers a range of benefits that cannot be ignored, while the risks of not having one can lead to significant challenges down the road.

Benefits of a Family Trust:

Asset Protection and Wealth Preservation: A Family Trust allows individuals to transfer their assets, such as property, investments, pensions, and valuable possessions, into a separate legal entity. This action helps shield these assets from potential risks, creditors, or legal disputes, preserving them for the benefit of their nominated beneficiaries.

Minimization of Inheritance Tax: Inheritance tax (IHT) can significantly impact the wealth passed on to the next generation. By setting up a Family Trust, individuals can employ various strategies to reduce the IHT burden of future generations, enabling more of their wealth to be passed down to their loved ones.

Avoiding Probate Delays: Probate can be a lengthy and costly process, subjecting families to months or even years of legal proceedings before inheriting their rightful assets. Assets held within a Family Trust can be distributed more efficiently, avoiding probate delays and reducing administrative expenses.

Ensuring Financial Security for Dependents: Family Trusts are particularly valuable for individuals with dependents who require long-term care or financial support. Parents can establish a Trust to cater to the needs of their children or vulnerable beneficiaries, ensuring their well-being even after they are gone.

Maintaining Privacy and Confidentiality: Wills are public documents, whereas Family Trusts offer a higher degree of privacy and confidentiality. By avoiding public scrutiny, families can protect their financial matters from prying eyes and maintain a level of confidentiality.

In conclusion, a family trust is a powerful and flexible instrument that can ensure financial security, protect assets, and preserve a family’s wealth across generations. It empowers individuals to take control of their legacy, reduce tax liabilities, and secure their loved ones’ futures. On the other hand, neglecting to establish a Family Trust can expose families to numerous risks, potentially leading to financial hardships and discord among beneficiaries. To secure a robust and stable future, consulting with financial advisors and estate planners to set up a Family Trust is a prudent step for every UK family.

Contact: [email protected]

12/01/2023

There' no ‘one-size-fits-all’ protection solution

With a New Year comes resolutions. Everyone should make a resolution to review their protection and estate plans. A solid plan will help you feel confident your family’s finances are secure.

Creating an estate plan is a step that can make a significant impact on the financial futures of your children and grandchildren. Despite common misconceptions, estate planning isn’t only for the wealthy. In fact, due to rising house prices and the freezing of the Inheritance Tax (IHT) nil-rate band until April 2028, IHT could now be more impactful than before.

Fortunately, there are various ways in which you can minimise this unexpected burden, ranging from making lifetime gifts to utilising pensions and trusts. To get the most out of these options, it’s best to seek professional financial advice. We can help guide you as you build a comprehensive estate plan tailored specifically to your needs, to ensure that your family is well-protected and their financial futures are secured.

Contact - [email protected]

16/11/2022

Why you need a Trust:

Many of you will understand what a Trust is, but not how having the right Trust in place can benefit you and your loved ones.
Trusts have been instrumental in protecting assets and tax mitigation since the nobility first used them to protect their lands and wealth when they went off to fight in the Crusades. Nowadays, you don’t have to be a wealthy landowner or part of the nobility to take advantage of the many benefits Trusts can provide.
When assets (property, cash etc) are distributed directly to the beneficiaries of a Will the value of these assets are now considered to be part of their estate. This could seriously impact vulnerable adults, such as those who are in receipt of means tested benefits, or those not capable of making their own decisions and young dependants.
These inherited assets are also now at risk of attack from the following issues:

· Remarriage after first death
· Divorce / separation of the beneficiaries
· Creditors / Bankruptcy claims
· Care costs
· Taxation

Having the correct Trust(s) in place essentially ring fences your assets providing protection from the above risks, from the family home, investments and any business or agricultural assets, whilst still be immediately available to your chosen beneficiaries after you are gone.

To learn more about HOW Trusts can protect your hard earned assets contact:

[email protected]

11/10/2022

A Guide to Lasting Power of Attorney


Why is a Lasting Power of Attorney important?
A Lasting Power of Attorney, formerly known as “Enduring Powers of Attorney” before legislation changed in 2007, enables your loved ones to manage your affairs if you are unable to.
If you anticipate losing the ability to make choices for yourself and want to make sure that your money and well-being are managed by someone you can trust, an LPA is a crucial document to take into account. It can give you reassurance that if and when you need it, someone you can rely on will be there to make decisions for you.
Making preparations in advance might also benefit your family and friends. It can make the process of getting you the help you need far smoother and quicker than if no LPA were in place.

Do you need a Lasting Power of Attorney?
You might believe that since your spouse would take care of you in the worst-case scenario, you won’t need an LPA. Unfortunately, that is not necessarily true; a Lasting Power of Attorney is still essential.
If an LPA is not in place before you lose the mental capacity, your loved ones will have to petition the Court of Protection for a deputyship. Your loved ones may go through a time-consuming, expensive process called a deputyship during an emotionally challenging time.
Take charge by making your Lasting Power of Attorney while you can still do so. This will not only help your family in the future but also give you peace of mind in the present.

The Responsibilities of an LPA?
There are two types of LPA.
A Property and Financial LPA enables the person or people you select to manage your financial affairs, including bills, assets, compensation, and bank accounts.
A Health and Welfare LPA gives your designated person or people the authority to choose your care, including where you reside and what treatments you get.
It is important to note that the people you select are only able to utilise their “powers” if you are unable to handle these issues on your own.

How can I appoint a Lasting Power of Attorney?
Making an LPA does not necessarily require the services of a solicitor. Estate planners will also be able to support you with this.

How long can the LPA Registration take?
LPA Registration currently takes 20 weeks; however, if an error or unanticipated circumstances arise, the application may be further delayed.
At Genus Estate Planning, we are on hand to help you put in place your Lasting Power of Attorney, and help plan your estate for the future. Get in touch with one of the team today, and we will assist you through the process.

[email protected]

20/09/2022

Protect Your House After Death !!

If you and your partner own a house together, it is important to consider how your property is owned. If one of you passes away, what happens to the house depends on how you and your partner own it.

Most homeowners are not aware of how their property is owned, and how the wrong type of ownership can have devastating effects on your loved ones after you pass away.

For example, if you are the sole owner of the property and you pass away, the house will be subject to the Rules of Intestacy. This means that your loved ones won’t have control over the house, and your surviving partner could find themselves homeless.

However, the rules get more complicated when you and your partner own the property together, as there is more than one way to do this.

If you and your partner own the property jointly, then on first death the property transfers wholly to the surviving co-owner. This may sound similar to what you had imagined, but this can actually cause problems further down the line for the surviving spouse.

If you and your partner are Tenants in Common, each party owns a definitive share of the property. If you die without a Will in place, your share of the house passes to your estate – it does not automatically transfer to your partner. Under the Rules of Intestacy, the house will be inherited by your next of kin, which could mean that your partner now has to share ownership of the house with your relatives.

Your house is one of the most valuable assets you will own. Make sure you know exactly what will happen to it after you are gone! Contact us now for more information.

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