Flexible Gift Planning

The most reliable method of reducing Inheritance Tax is for an investor to gift assets to his/her beneficiaries while still alive. So long as he/she then lives a further 7 years after the date of the gift, the assets are deemed to be outside the estate and will not suffer Inheritance Tax on the donor’s death. Whilst effective tax planning, the drawback to the investor is that once given away, it reduces their options for future personal income as well as relinquishing control on how that gift may be treated by prospective beneficiaries.

WAY provide a solution to this concern over access and control by establishing a trust within which one can manage a portfolio of assets (unit trust and OEICS) but allow, in co-operation with trustees, the investor to draw down an income and also have the flexibility to make gifts or loans from the accumulated portfolio assets to third parties.

An income rate (normally 10%) is established at the outset of the trust but this may be varied each year depending on circumstance – thus it can be taken in whole or part, or simply remain in the trust. The ability to access emergency money from the trust to, say, assist with son/daughter house purchase is a huge comfort to those investors who feel denuded by making an outright gift.

The WAY Flexible Inheritor Plan has successfully assisted investors with IHT mitigation since its introduction in 2003 and continues to be the only plan of its type which allows collective investment portfolios to be utilised, thus taking advantage of capital gains allowances and the more favourable CGT rates now available.