😉😎 NOT about the UK election!

🌅 Hello! 

In this week’s Financial Stuff:

• 🎯 Easy Inheritance Tax Planning

• 💷 Avoid distractions

• 🤔 Make more of your cash reserves

👇 Let’s get started…

I was on a working holiday in Mallorca when the general election took place last week.

And my postal vote didn’t arrive in time so I couldn’t vote 😧 It’s the first time I’ve missed since I was 18 and it felt strange.

But enough!

I’ve decided not to mention the election again or dwell on possible Labour changes in this week’s Financial Stuff, because I’m sure like me you’re growing weary with the topic…

🎯BUSINESS OWNERS STRATEGIES
Inheritance Tax Planning without trying

For most people inheritance tax isn’t something they think too much about until their later years.

Then it seems it either becomes a bit of an obsession, or its pretty much ignored on the basis that ‘the kids will get more than I got anyway.’

The rules might change, who knows, but at the moment if you are 1) a private business owner and 2) invest in a pension fund…

…you’re already doing some significant IHT planning for your family without really trying.

Let me explain.

IHT Business Relief can reduce the value of the shares for IHT purposes by up to 100%, effectively exempting them from IHT and significantly reducing the tax burden on the estate. To qualify the following conditions generally must be met:

1. Type of Business: The business must be a trading company, not an investment company. This means it should be actively involved in trading goods or services rather than merely holding investments.

2. Length of Ownership: The shares must have been owned for at least two years prior to the date of death to qualify for Business Relief.

3. Relevant Assets: The relief applies to business assets that are used wholly or mainly for the purposes of the business. Assets that are not used for business purposes, such as investment property, are typically excluded.

4. Control and Influence: Shares in companies where the deceased had control or significant influence are more likely to qualify. This typically includes majority shareholdings or shares that allow the owner to make key business decisions.

Assets held in a pension fund are usually outside of the deceased's estate, meaning they can be passed on without incurring IHT.

The tax treatment depends on the age at death: if the pension holder dies before age 75, the pension can usually be paid out tax-free.

If they die after age 75, the beneficiaries may have to pay income tax on withdrawals at their marginal rate, but no IHT is due.

So just by owning shares in your private company and moving funds into a pension you have an effective estate planning tool without any effort!

🤔 MARKET INSIGHTS
The importance of avoiding distraction…

😎AND FINALLY
This week on Youtube

In this week’s Youtube video I’m looking at a case study of a business owner who wants to do more with her cash reserves, whilst still keeping them accessible.

That’s all for this week! Hope you enjoyed reading and if you have any questions at all, drop me a note.

Hilary 😎

P.S. GET SMARTER IN LESS THAN 5 MINUTES!
I upload a super short helpful financial video on YouTube every week - you can check out my channel here!

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