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Latest News

Residence Nil Rate Band (RNRB).

A new tax-free allowance was announced in the Summer Budget 2015 (the Residence Nil Rate Band) that will take effect on or after 6th April 2017.  Downsizing provisions have yet to be finalised.

There are a lot of myths and misconceptions surrounding this new allowance - please call or view our website pages (not yet updated) for further information - including:

  • everyone has a new allowance of £1M;
  • everyone can pass their home free of tax to their children

You may not get the full allowance (or double the allowance) if:

  1. your estate exceeds £2M
  2. you rent property
  3. you don't leave your property (or proceeds of sale) to the right qualifying people and in the right manner
  4. you are unmarried

WATCH THIS SPACE!

Asset Protection and Estate Planning

Will Trusts and Life Planning Solutions

All of us would hope that all our wealth would be available to be enjoyed for many years by our family and loved ones and for the generations beyond.

Our wealth should not just be thought of as solely our free estate which we own and can pass via our Will but also other funds that might be available to others and paid out on our death.  We might consider our estate to consist of (amongst other things):

  • The family home;
  • Other properties;
  • Stocks and shares;
  • Bank/savings accounts, bonds and investments;
  • Business and agricultural assets; and
  • Jewellery, cars, art and other personal effects.

 

Other funds that might be paid out on our death and not pass via our Will include:

  • death in service benefits;
  • pensions;
  • life assurances; and 
  • other trust funds.

 

However, once you’ve died, factors outside of your control might mean that within one or two generations your wealth has been lost, claimed or wasted – to people such as:

  • the tax man;
  • the local authority;
  • a new partner/spouse and then his/her children;
  • claims against your beneficiaries, e.g. creditors.

 

Without any estate planning, whether you have a Will or not, any of the following could happen:

  1. Your estate is taxed once on your death, again when your children die, again when your grandchildren die.  Over just a few generations the tax man has become a major beneficiary of your estate.
  2. Your death in service benefits will pass to your partner/spouse tax-free but when they die your children will share it with the tax man.
  3. Your property is sold on 2nd death to pay for years of long term care of your surviving partner.  With average annual costs of approximately £40,000, your children will share their inheritance with the local authority.
  4. After you die, your partner/spouse finds someone else.  You wealth might be lost to that new partner or his/her children – people you’ve never met.

 

Cornerstone Wills has several options to protecting your assets and which solution or solutions work(s) best for you will depend on factors such as:

  • Your age, marital status, health, lifestyle and plans for the future;
  • The value of your home and whether it is mortgaged;
  • What other funds are available and any income generated;
  • How much of your estate you need yourself whilst you are still alive;
  • How much of your estate your partner/spouse needs whilst they are alive and what funds they have themselves;
  • How much of your estate you also wish to protect for future generations.

 

One or more of the following options might be best for your requirements.  Click on the link for more information:

Will Trusts

  • The Property Preservation Trust – a Will trust protecting your share of the family home;
  • The Nil Rate Band Trust – a Will trust protecting your inheritance tax free allowance £325,000 (2012/13);
  • The Flexible Life Interest Trust - A Will trust giving access to the home and the capital and income from other assets;
  • The Business Property Relief Trust – A Will trust to preserve any tax relief you might get on business assets;
  • The Special Needs Trust - to preserve the State benefits received by the disabled or special needs person but to make available income and, if necessary, capital to supplement those benefits; and
  • The Protective Trust – to protect your assets from being lost or wasted by a beneficiary, e.g. through bankruptcy.

Lifetime Planning Solutions

  • The Home Protection Plan – a lifetime trust protecting the home;
  • The Family Trust – a lifetime trust protecting lump sum payouts from pensions, life policies and death in service benefits; and
  • The Deferred Lease – a scheme for a buy-to-let portfolio that takes the property out of your taxable estate but enables you to retain the rental income