Inheritance tax is a complex topic. Many aren’t aware of its potential impact on the financial legacy they leave behind. Let alone, the different ways to reduce or avoid it.

Ultimately, advisers with experience in dealing with inheritance tax matters can help families save significant amounts of money, where possible. As a result, by reducing or avoiding inheritance tax, a larger portion of an individual’s estate can be passed on to their loved ones.

Related reading & services

Here’s how a financial adviser can assist in this process.

Can a financial adviser help reduce and inheritance tax bill?

A financial adviser brings a wealth of knowledge about the various legal and financial strategies that can help reduce or avoid unnecessary tax liabilities. Their role typically involves the following areas.

1. Assessing your estate

A financial adviser will start by assessing the value of your estate. This takes into account all assets and liabilities. This is the first step in understanding any potential inheritance tax liabilities.

2. Tailored advice

Based on the assessment, a financial adviser can provide tailored advice on structuirng your estate to minimise inheritance tax. This might include recommendations on gifting, setting up trusts, and other means to negate this tax.

Related reading

3. Allowances and reliefs

Financial advisers can help you make full use of allowances and reliefs, such as the nil-rate band, residence nil-rate band, and any transferable allowances from a deceased spouse or civil partner.

4. Investment strategies

Financial advisers can recommend investment strategies that qualify for inheritance tax relief, such as those that are eligible for Business Property Relief.

5. Life insurance policies

They can guide you on setting up life insurance policies that can be used, where possible, to cover an inheritance tax bill.

6. Pension advice

Pensions can be a tax-efficient way to pass on wealth. Financial advisers can provide tailored pension advice on using pensions in estate planning to reduce inheritance tax.

7. Regular reviews

Laws, regulations, and personal circumstances can change. A financial adviser can offer regular reviews to ensure your inheritance tax planning remains effective over time.

The benefits of professional inheritance tax advice

In the next section of this short guide, we look at the potential benefits of getting professional inheritance tax advice.

1. Expertise

Many financial advisers have specialised knowledge of the tax system and can work through complex legislation, helping you to fully understand your inheritance tax position and the best ways to avoid it, where possible.

2. Objectivity

They provide an objective viewpoint, which can be crucial in family discussions about estate planning and IHT. They can help present the facts, helping to provide clarity.

3. Time-saving

They can manage the administrative burden of estate planning, saving you time and effort. Their experience means once they collect the relevant information, they can provide accurate advice in a timely manner.

4. Peace of mind

Knowing that an inheritance professional is considering all available strategies can provide peace of mind that your estate is as tax-efficient as possible.

5. Ongoing support

Financial advisers can offer ongoing support, adapting your inheritance tax planning needs to any changes in your circumstances or legislation.

Helpful resources

Can a financial adviser help reduce an inheritance tax bill? Summary

Absolutely, a financial adviser can help with inheritance tax. They can be invaluable in IHT planning, offering expertise, objectivity, and tailored plans to reduce or avoid potential tax liabilities.

Their guidance can ensure that you make the most of the reliefs and exemptions available and that your estate is passed on according to your wishes, with the smallest tax burden possible.

If you’re considering how to manage your inheritance tax liability, consulting with one o qualified financial adviser is a prudent first step.

Call us today on 01329 550190 to talk to an expert.