Common misconceptions about Inheritance Tax Planning

Posted by: Nicola Macdonald, on November 3, 2015.

One of our most enjoyable outcomes when helping couples or individuals is reducing their current Inheritance Tax liability. This is because we are helping them to increase what is ultimately passed to their chosen beneficiaries, whilst also recognising they don’t want any compromise to their current financial security and independence.

But it’s fair to say that there are some common barriers we encounter to Inheritance Tax planning. Perhaps one or more is familiar to you:

  1. You still require access and control of your funds
  2. Health – You are not keen on GP medicals or some form of medical underwriting
  3. Complexity – It’s not easy to understand what is being proposed
  4. Risk – There is a perception that either the underlying investments to be used are too risky or that the actual IHT strategy itself may be risky and attacked by HMRC

A simple and long standing alternative that overcomes all of these common problems is known as a Flexible Reversionary Trust. In brief, this can provide the following benefits;

  • Access can be retained to your funds
  • Any growth on funds placed into Trust is immediately outside the estate, which means less Inheritance Tax and more passing to your beneficiaries
  • A simple “conveyor belt” of annual maturities can be created on a totally bespoke basis, this means that you can plan when and how you withdraw funds
  • As with simple gifts, the original amount placed into Trust falls outside your estate after 7 years, so the sooner you start this 7 year clock running the better

Take a look at this short 3 minute video.  It explains all of the above in a little more detail.


Enter your email

Get free investment, pensions and wealth management news and advice.

* indicates required

*We will never share your details with any third party.


Client Stories

Book a consultation

Your Name (required)

Email (required)

Phone Number


Employment Status


What you would like to talk about?


Enter exactly what you see above

Enter your email to receive free relevant news and updates.

* indicates required

*We will never share your details with any third party.

Latest… View all

Putting the current stock market decline in context

There’s no doubt hyperbolic headlines depicting the recent falls on the world’s financial markets are potentially anxiety-inducing. With the FTSE 100 Index falling to its lowest level since April 2017, the effect of the headlines is to promote a sense of uneasiness; we’re here to remind you that this shouldn’t be the case. Instead of […]

Read more →

Inheritance Tax is an avoidable tax

It is often said that Inheritance Tax is an avoidable tax, but many of us somehow fail to avoid it. Why is this? In our experience, clients’ failure to plan effectively is a result of the following perceived problems: Speed – How often will the thought of having to survive 7 years from the date […]

Read more →

What went wrong with the forecasts?

Reading the tea leaves Investors at year-end are inclined to reflect on the 12 months gone and muse on what the coming year might bring. Aware of this appetite for speculation, themedia tends to feed it with forecasts. These articles can be fun to read, but are even more so a year later. In January […]

Read more →

What should investors make of bitcoin mania?

Bitcoin and other cryptocurrencies are receiving intense media coverage, prompting many investors to wonder whether these new types of electronic money deserve a place in their portfolios. Cryptocurrencies such as bitcoin emerged only in the past decade. Unlike traditional money, no paper notes or metal coins are involved. No central bank issues the currency, and […]

Read more →