In the past few years the value of many assets has enjoyed significant growth, and whilst this has been beneficial to investors, it now means that an increasing number of individuals and their families face a growing Inheritance Tax (IHT) burden. There are a number of ways to mitigate, and in some instances eliminate, the problem and as a first step it is essential to ensure that Will arrangements are up to date.

Making significant gifts of capital can achieve a reduction in the potential IHT liability. But the investor loses access to both capital and income. There are however some investment solutions which go some way to resolving these issues such as Discounted Gift Trusts (DGT) and Gift and Loan Trusts. Investment in certain AIM shares become exempt from IHT after two years, and in some circumstances the value of the investment can be protected from market fluctuations. The investor therefore retains access to capital and any income it may produce.

Posted: July 3rd, 2007 under Asset Management.
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