Long Term Care & Estate Planning
There comes a point in everyone's life when we need to plan for what happens to our estate after we are gone or how to pay for long term care should we need it in later life. At Alexander James we have the necessary expertise to guide you through the difficult decisions you need to make.
The starting point of this process is always to ensure that you have an up to date will and to nominate powers of attorney to those you can trust and who will have your best interests at heart. Should you, or a loved one, need to go into a care home we are able to advise you on the best way to fund the care home fees whilst protecting your assets.
Care Annuities are a very tax efficient way of paying for long term care because they are paid directly to the care home and are not subject to income tax.
- Security - a Care Annuity will pay care home fees for you or your loved one for as long as you need care.
- Peace of mind - you will never need to move to a less expensive home due to running out of funds.
- Reduced Inheritance Tax liability - the cost of your annuity is removed from the value of the estate.
- If you use a Care Annuity it also enables you to plan for the smooth dispersal of the rest of the estate in the full knowledge that the care home fees are covered.
- Deferred care annuity - there are a growing number of providers who provide this facility. The deferment period can be anything up to five years. This can be paid for through regular payments or a lump sum.
- Immediate care annuity - This provides immediate cover to pay for care home fees and requires an upfront, lump sum payment.
- Use of Trusts - at Alexander James we are able to advise you on the use of a range of different trusts to enable you to plan for any Inheritance Tax liabilities.
- Use of Business Property Tax Relief - at Alexander James we have access to and are able to advise on a wide range of products that use Business Property Tax relief to plan for Inheritance Tax liabilities.
- Gifting - Alexander James are able to advise you on how to use your gifting allowance, and potentially exempt transfers as a way of planning for the dispersal of your estate.
Did You Know!?
Inhertance Tax Gifts and Transfers
You can gift part of your estate every year to your friends and family and help to reduce your IHT liabilities.
A maximum of £250 per year
to any person
A maximum of £3000 in total
gifts per year
A wedding gift of up to £5000 for
your child or partner
A wedding gift of up to £2500 for your grandchild and their partner
A wedding gift of up to £1000
to anyone else
Potentially Taxable Gifts
If you wish to make a larger gift to a friend or a family member you can.
These gifts will remain a part of your estate for seven years after the transfer.
This means that if you were to die during this seven year period the gift would still be subject to IHT. However the taxation does go down on a sliding scale depending upon the time in which death occurs during that seven year period.
The technical name for these gifts is a potentially exempt transfer (PET).
Gifts in Trust
You can also place a gift in trust so the gift fall outside of your estate.
The same seven year rule applies
The maximum you can place into
trust is £325000
If you exceed this amount you will pay tax on excess above £32500 of the gift at 20%