IHT planning 'should start early'

Inheritance Tax (IHT) need not be a burden and though it is advisable to start planning early, it is never too late to begin, financial advisers have said.

For homeowners in Belfast and Northern Ireland, sitting down with a solicitor to plan how to deal with IHT should be done as early as possible, but Calculis has claimed that even older people can still sort out their affairs.

Last October, chancellor Alistair Darling doubled the tax-free threshold for married couples or those in civil partnerships and the government claims that most estates in Belfast and Northern Ireland will remain exempt.

Alex Pegley, director for Calculis, said that although this has been a positive step for homeowners, people in Belfast and Northern Ireland who must pay IHT will still need to make sure they have plans.

"They need to take a number of steps. If one does have one of these larger estates or larger portfolios - despite the two nil-rate bands being available if it's a married couple or a civil partnership - the starting point is still, as it always used to be, to put in place discretionary will trusts. Because that way you're actually controlling the assets from beyond the grave," Mr Pegley said.

"There's many good trusts out there that can be used - a loan trust can be used to freeze the value of one's assets, but still allow you access to the capital. One can use discounted gift trusts, which I'm a huge fan of and have seen work very well…To enable one to continue to enjoy an income from your asset whilst making it a gift; and that can also immediately reduce the value of your estate, from day one," he advised.

Mr Pegley concluded: "People are never really too old to do IHT planning. It's a common misconception that: 'I'm in my mid to late eighties, it's too late now'.

"Starting early [is important], but also carrying on throughout. I think it's quite imperative to start sooner rather than later."

Solicitors can help homeowners in Belfast and Northern Ireland set up all of the above structures to deal with IHT.

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