Although for many doctors the idea of estate planning is hopefully a long way away, it is always worth a look with a view to arranging finances in the most tax efficient way. Here is some of the latest advice available.
Firstly, the Government announced in the Summer Budget 2015 that the current IHT nil-rate band will remain at £325,000 until at least 2021. With property prices seemingly booming again in Bristol and surrounds this is bound to see a greater number of local doctors falling into the Inheritance Tax threshold.
Although the new 'Main Residence Nil-Rate Band' will help to a degree - this will not apply to those doctors without grandchildren or children to leave their home to. Nor will it help doctors whose main home is insignificant compared to their overall assets.
Local married doctors who currently live in a comparatively low-value property but have liquid assets available for investment may want to consider 'upsizing' to a bigger property up to a value of £350,000 in order to fully utilise the new 'Main Residence Nil-Rate Band' allowance.
Other methods for planning for a potential future inheritance tax liability could be using the Annual Exemption, gifting out of normal expenditure out of income, using reliefs for business and agriculture, making out right potentially exempt gifts, using deeds of variation and establishing life assurance based trust arrangements.
A word of caution on the use of Deeds of Variation (varying the terms of a will posthumously); the Government are currently reviewing their use and so it may be that this planning tool will become ineffective for tax planning purposes in the near future.
If you are a doctor concerned about inheritance tax or estate planning in general, or indeed in you have family members that are in this position, then please do get in touch for an initial chat on email@example.com or telephone 0117 966 5699.