Thomas had just turned 76 and decided he wanted to seek help in mitigating the Inheritance Tax (IHT) liability on his estate.
He did not know how long he would live for, or if he would need long-term care. Thomas was single and had no children.
What did we do?
We recommended that Thomas invest in a Discounted Gift Trust; this meant that, if he survived seven years, the capital invested would be IHT-free.
Importantly, it also enabled Thomas to continue to receive the income on the investment.
Sadly, Thomas entered a care home in 2011, when the Lasting Power of Attorney was implemented. He then passed away in 2013. In total £160,000 of IHT was saved.
Although the investment gain was subject to income tax when payable to the beneficiaries, the pay outs were structured so that little or no tax was paid; also saving around £160,000.