Estate and wealth planning by Hugh James

Client background

Our Estate Planning team recently assisted a high net worth (UHNW) client facing complex estate planning concerns. The client’s vast estate included diverse assets such as high-value farming assets (approximately £16 million), various properties and investments in the UK, and additional holdings in France.

Challenges

The primary objective of our collaboration was to devise a comprehensive strategy to mitigate the potential inheritance tax (IHT) liability associated with the client’s extensive and diverse estate.

Key areas of focus

Inheritance tax mitigation:

• Thorough examination of potential IHT liability.
• Detailed analysis of Agricultural Relief (AR) and Business Relief (BR) applicability for IHT purposes.
• In-depth discussions regarding the nuances of AR on various elements of the client’s farm, the farming business, and the complexities surrounding AR relief, particularly concerning the farmhouse.

Wills as strategic planning tools:

• Exploration of wills as a crucial planning tool.
• Maximizing efficiency in relation to AR and BR assets.
• Addressing concerns related to providing for the surviving spouse while safeguarding the estate from third-party claims.

Brussels IV and its impact:

• Examination and discussion of Brussels IV and its potential impact on the client’s estate planning strategy.

Lifetime planning options:

• Detailed consideration of various lifetime planning options.
• Exploration of strategies such as lifetime gifting and lifetime trusts.
• Comparative analysis of Family Investment Companies and their suitability in the context of the client’s estate.
• Exploration of tax-efficient investments qualifying for Business Relief.

Outcome

Our dedicated estate planning team provided the client with a meticulously crafted estate planning strategy tailored to their unique circumstances. The holistic approach addressed both immediate concerns, such as IHT liability, and long-term considerations, including the protection of the estate for the surviving spouse and potential third-party claims.

Client background

Our recent engagement involved providing strategic advice on estate planning concerns, including the preparation of a will and lasting powers of attorney (LPAs), for a High Net Worth (HNW) client. The client’s extensive estate comprised diverse assets, including several business interests and twelve properties. Notably, all properties were personally owned, with the majority serving as integral assets for the client’s various companies.

Key areas of expertise

Estate planning and will preparation:

• Detailed assessment of potential Inheritance Tax (IHT) liability.
• Thorough exploration of Business Relief (BR) for inheritance tax purposes, particularly in relation to properties utilised in the course of business.

Lasting powers of attorney (LPAs):

• Strategic advice and preparation of Lasting Powers of Attorney to ensure the client’s wishes and businesses are safeguarded in case of incapacity.

Lifetime planning strategies:

• Examination of potential IHT liabilities in the context of the client’s estate.
• In-depth analysis of the availability of Business Relief (BR), specifically considering properties integral to the client’s business operations.
• Recommendations on lifetime planning, encompassing the use of lifetime gifting to reduce potential tax burdens.
• Exploration of lifetime trusts as a means to protect and manage specific assets for the client’s beneficiaries.
• Identification and consideration of tax-efficient investments qualifying for Business Relief.

Outcome

Our dedicated team provided the HNW client with a comprehensive estate planning strategy that not only addressed immediate concerns but also set the groundwork for a secure and efficient transfer of assets to future generations. By meticulously assessing IHT liabilities, optimising the use of Business Relief, and integrating lifetime planning strategies, we aimed to create a tailored plan that aligns with the client’s financial goals and ensures the preservation of their legacy.

Client overview

Our recent collaboration involved a client seeking expert advice on existing wills, estate planning, and inheritance tax (IHT) implications. The client’s estate boasted diverse assets, including several properties, expansive land holdings, and a jointly owned complex comprising dwellings, offices, and retail spaces.

Key focus areas

Business relief for inheritance tax:

• Thorough analysis of the availability of Business Relief (BR) for IHT purposes.
• Strategic recommendations to optimize the use of BR for qualifying assets within the estate.

Wills as strategic planning tools:

• Utilisation of wills as a pivotal planning tool.
• Maximizing efficiency surrounding BR qualifying assets.
• Implementation of first-death discretionary trusts to enhance estate planning flexibility.

Lifetime gifts:

• In-depth exploration of lifetime gifting options.
• Evaluation of potential advantages and disadvantages associated with property transfers to children during the client’s lifetime.
• Analysis of gifts out of surplus income as a tax-efficient strategy.
• Consideration of the benefits and drawbacks of utilising lifetime trusts for specific assets.

Outcome

Our estate planning team provided our client with a detailed and tailored estate planning strategy, addressing existing wills, inheritance tax concerns, and long-term financial goals. By delving into the intricacies of Business Relief, optimising the use of wills as planning tools, and carefully considering lifetime gifting options, we aimed to create a comprehensive plan that aligned with the client’s specific needs and objectives.