Question 1

How do you work with accountancy firms and IFAs without disrupting the existing client relationship?

Accepted Answer

The client relationship remains yours throughout. We operate as a specialist technical resource — on a white-label or co-branded basis — providing the estate planning analysis, trust documentation and implementation support under your instruction and within an agreed professional scope. We do not prospect your clients independently or seek to extend the engagement beyond what you have sanctioned. Every arrangement operates under full professional indemnity cover. The result is that you retain the relationship and the client's trust, while the technical depth behind the advice reflects a level of specialism that most generalist practices cannot replicate in-house.

Question 2

What information do you need to begin a meaningful estate planning review?

Accepted Answer

A thorough estate planning review requires a complete picture of the client's position. We typically ask for a current family tree; the status of any existing wills and trusts; a schedule of assets and estimated valuations, including property, business interests and investments; details of how assets are owned — sole, joint, or through a company or trust structure; pension arrangements and any life assurance in place; a gifting history covering at least the preceding seven years; domicile and residence status; and a clear statement of the client's objectives. The more complete the information provided at the outset, the more precise and practically useful our recommendations will be. Gaps in the picture tend to produce gaps in the planning.

Question 3

Which inheritance tax allowances and reliefs do you work with?

Accepted Answer

We work systematically through the full range of available allowances and reliefs: the Nil-Rate Band, the Residence Nil-Rate Band, the spouse and civil partner exemption, the charitable exemption, and — where the qualifying conditions are met — Business Property Relief and Agricultural Property Relief. For clients with significant pension assets, the interaction between those reliefs and the proposed April 2027 pension changes now forms an increasingly important part of the analysis. The right combination of reliefs depends entirely on the client's specific circumstances, asset composition and objectives. There is no standard template that applies across all estates.

Question 4

How do the seven-year rule and taper relief actually work in practice?

Accepted Answer

Most outright lifetime gifts are Potentially Exempt Transfers. If the person making the gift survives seven years from the date of the gift, the transfer falls outside the taxable estate entirely for inheritance tax purposes. Where death occurs between three and seven years after the gift, taper relief may reduce the inheritance tax payable on that specific transfer — but it is important to understand that taper relief reduces the tax charge, not the Nil-Rate Band. The Nil-Rate Band is consumed by chargeable transfers first, in chronological order, and taper relief applies only to the residual tax on the gift itself. This distinction is frequently misunderstood and can materially affect the planning conclusions drawn from a gifting history.

Question 5

When is whole-of-life assurance the right tool for inheritance tax planning?

Accepted Answer

Whole-of-life assurance written in trust is most valuable where an estate carries a known or anticipated IHT liability that cannot be eliminated through reliefs and exemptions alone — particularly where the estate is illiquid, where business or agricultural assets form the primary holding, or where the BPR position is uncertain. A correctly structured policy provides a sum broadly equivalent to the anticipated liability, held outside the taxable estate in trust, available immediately on death without waiting for probate and without itself attracting a further IHT charge. It gives executors the means to settle the liability without forcing the sale of property or business assets under time pressure. The cost of the policy increases with age and deteriorating health, which means acting early produces materially better terms.

Question 6

How do you assess whether a business qualifies for Business Property Relief?

Accepted Answer

The starting point is whether the business is genuinely trading rather than primarily or wholly investment in character — a distinction HMRC applies with increasing scrutiny. We review the nature of the business activity, the composition of the balance sheet, the treatment of surplus cash, group structure, share rights and the history of the business's trading operations. Where the qualifying position is at risk — for example, where significant cash reserves or investment assets sit within the company — we can advise on restructuring to support and evidence trading status, always grounded in the commercial reality of the business rather than driven purely by tax considerations. This analysis should be undertaken well in advance of any anticipated transfer, not at the point of death.

Question 7

Can excess cash within a company jeopardise Business Property Relief, and what can be done about it?

Accepted Answer

Yes. Surplus cash or investments held within a trading company that are not demonstrably required for the purposes of the trade may be treated as excepted assets and excluded from Business Property Relief. The practical effect is that a portion of the business value attracts no relief and remains fully taxable. We help clients evidence the trading purpose of retained funds, review and document treasury policies, and — where appropriate — segregate non-trading assets from the qualifying business to protect the relief position. This is an area where early, proactive work produces significantly better outcomes than last-minute remediation.

Question 8

Trusts or a Family Investment Company — how do you decide which is more appropriate?

Accepted Answer

Neither structure is universally superior. The decision depends on the specific planning objective, the nature of the assets, the family circumstances and the client's appetite for ongoing administration. Trusts offer a high degree of protection, flexibility and control over how and when assets are distributed to beneficiaries. A Family Investment Company allows the founding generation to retain voting control while shifting future growth — and the tax on that growth, charged at the corporate rate — away from their personal estate. In practice, the most effective estate plans frequently combine both structures, using each where it is best suited to the objective at hand rather than treating them as mutually exclusive alternatives.

Question 9

How do cross-option agreements and life assurance work together for business succession?

Accepted Answer

On the death of a business owner, the shares or partnership interest will pass under their will or intestacy rules — potentially to beneficiaries who have no involvement in the business and no obligation to sell. A cross-option agreement addresses this by giving the surviving owners the right to purchase the deceased's interest and giving the deceased's estate the right to require that purchase. Critically, neither party is obliged to exercise their option — which preserves the Business Property Relief position, as a binding obligation to sell can affect whether the asset qualifies for relief. Life assurance held in trust provides the funds to complete the purchase, giving the surviving owners the liquidity to acquire the shares at fair value and the deceased's estate a clean cash settlement rather than an illiquid business interest.

Question 10

Can investment property be protected from inheritance tax?

Accepted Answer

Business Property Relief does not generally apply to investment property, as HMRC requires the business to be trading in character. However, a range of alternative strategies may be appropriate depending on the client's circumstances: trust structures, a Family Investment Company to hold property within a corporate wrapper, debt strategies, phased gifting over time, or trust-owned life assurance to fund the eventual liability. Each of these approaches carries its own implications for Capital Gains Tax and, where relevant, Stamp Duty Land Tax — and the planning must account for all three taxes together rather than optimising for inheritance tax in isolation.

Question 11

Do clients genuinely need both types of Lasting Power of Attorney?

Accepted Answer

Yes — both the Property and Financial Affairs LPA and the Health and Welfare LPA. They cover fundamentally different ground. A financial LPA without a welfare LPA leaves critical decisions about care, medical treatment and personal welfare unprotected. A welfare LPA without a financial one leaves whoever manages the client's care without the legal authority to fund it. Without either in place, the alternative is an application to the Court of Protection for a deputyship order — a process that typically takes many months, involves ongoing supervision, annual reporting requirements and recurring costs, and may result in an appointed deputy who does not reflect the client's wishes. Both LPAs are a foundation of sound planning, not an optional or secondary consideration.

Question 12

How do pensions fit into estate planning in light of the proposed April 2027 changes?

Accepted Answer

This is the area of most significant change in estate planning at present. From 6 April 2027, most unused defined contribution pension funds and pension death benefits are proposed to be brought within the scope of inheritance tax — reversing the long-established position under which pensions sat outside the taxable estate. For many clients, this makes the pension the largest single IHT exposure in the estate rather than a planning tool that mitigates it. The implications extend beyond the headline IHT charge: the inclusion of pension funds in the estate may affect the availability of the Residence Nil-Rate Band, and for those over 75, the interaction between inheritance tax at the estate level and income tax on beneficiary withdrawals creates a layered exposure that requires active management. Nomination decisions, drawdown sequencing and the age 75 rule are now central considerations in any estate plan that includes significant pension assets. We help clients and their professional advisers address these questions ahead of the legislative change, while the full range of planning options remains available.

enquiries@willstaxandtrusts.com

0118 934 7920

FAQs

How we work with accountants and advisers – and how we approach estate, trust and inheritance tax planning.