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Rookie Investor
Posted: 12 November 2024 12:09:25(UTC)
#11

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I met an IFA recently about estate planning, it was free advice and I knew it would amount to not much - just wanted any input I had not considered before.

Turned out he did not really provide anything useful. Felt like I knew more than him. These people are just salesmen who want AUM to earn their fees for doing practically not much. He went on about the merits of passive funds being low fee and better performance, then went on to say he charges 1% pa to manage it. I asked what to manage for exactly, and he said to allocate it well for the trusts etc.

Better o go to a STEP solicitor once you know all the basic options. Just use the IFAs for free advice on anything you had not considered.
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Carl blue nose on 12/11/2024(UTC)
Bellabeck
Posted: 12 November 2024 16:03:11(UTC)
#12

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I would choose a Chartered Financial Planner (CFP) to assist with inheritance tax planning, paid on an hourly consultancy fee basis, so no chance of them having a percentage of your investments. We have a gift and loan trust set up by our CFP and I think it works well, alongside our SIPPs, ISAs and gifting arrangements (under Potentially Exempt Transfer). Note to wise keep a spreadsheet annually updated for any gifting (either out of surplus income or PET) so your Trustees can argue with HMRC the rules under which gifts were made.
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4 users thanked Bellabeck for this post.
john brace on 12/11/2024(UTC), Rookie Investor on 12/11/2024(UTC), Carl blue nose on 12/11/2024(UTC), Jonathan7 on 15/11/2024(UTC)
Rookie Investor
Posted: 12 November 2024 16:13:51(UTC)
#13

Joined: 09/12/2020(UTC)
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Bellabeck;325424 wrote:
I would choose a Chartered Financial Planner (CFP) to assist with inheritance tax planning, paid on an hourly consultancy fee basis, so no chance of them having a percentage of your investments. We have a gift and loan trust set up by our CFP and I think it works well, alongside our SIPPs, ISAs and gifting arrangements (under Potentially Exempt Transfer). Note to wise keep a spreadsheet annually updated for any gifting (either out of surplus income or PET) so your Trustees can argue with HMRC the rules under which gifts were made.


I think a gift and load trust is useful only when concerned with gifting money that might be needed but at the same time concerned that this same money might grow to the point of increasing IHT materially? It is no quite a substitute for a PET as the loan itself still sits inside your estate. Is this the reason why you did it and if not what reason was it for?

Is the income you receive from a gift/loan trust taxable at income tax rates or not? The IFA I spoke to said it is not but I am not convinced. Any other fees in setting it up?
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Bellabeck
Posted: 23 January 2025 14:26:32(UTC)
#14

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Only just seen this comment. The gift is the increasing value (dividends & captial gain) and the loan is back to you as the donor. You only take back a maximum of 5% p.a. of the funds put into the trust, This money is not taxable as you are only taking back money (principal) on which all taxes previously paid. The trust is off-shore and whilst it is registered and known to HMRC it sits outside of your estate, there is also a separate legal document attached to your Will for this.

I hope i have a) understood this correctly myself, and b) not misled anyone if i haven't!

please DYOR.
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Carl blue nose on 26/01/2025(UTC)
Joe 90
Posted: 21 February 2025 07:06:16(UTC)
#15

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A fundamental challenge with estate planning is that the rules can (and do) change frequently. With (say) a 20-30 year time horizon, this makes it close to impossible to be certain of achieving a successful outcome.

It's also probably fair to say that the direction of travel for the next few years, is towards more restrictions, higher tax and closing "loopholes" and schemes.

My approach is to keep it as simple as I can and stay flexible: give our children as much as we can afford when they need it (ie buying a home and starting a family) then spend at a rate that will reduce our assets to the house and a sensible chunk of money, under the IHT threshold, at age 80 to last for our final years.

The house will pay for any care home fees and with 2 state pensions, we won't go hungry.
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3 users thanked Joe 90 for this post.
Jonathan7 on 21/02/2025(UTC), Rob B on 21/02/2025(UTC), D Bergman on 21/02/2025(UTC)
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