The complexities of succession planning 

Succession, the hugely popular TV show, highlights the complexities of wealth transfer. There’s a lot to think about when passing on your wealth – as well as the risk of family disputes, tax implications need to be taken into consideration. 

Preserving, planning and communication 

As families accumulate wealth and assets it becomes important to preserve these and to plan the transfer across generations. Without a solid succession plan, a family’s hard-earned wealth could be at risk of erosion or loss, leading to potential disputes down the line. 

Open communication through proactive discussions with all family members is important. 

Take care with property 

If you’re planning to gift property during your lifetime, you need to be aware of complicated Inheritance Tax (IHT) rules around this. For example, if you gift a house to a family member but continue to benefit from it in some way, it will remain part of your estate when you die and HMRC could tax your loved ones at 40% on anything over the tax-free threshold. 

Reclaiming overpaid IHT 

Even when the estate has paid any IHT that’s due, that’s not the end of the story. 

Following several years of significant house price growth during the pandemic, property prices are now falling. This means that properties that were valued for IHT at the height of the pandemic are now likely to sell for less. Over the years, stock market volatility due to political and economic uncertainty has also led to investment losses for many. So, the IHT bill may have been overpaid and the estate will need to put in an overpayment claim. 

There’s plenty to consider. For support with your succession plans, get in touch. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. The Financial Conduct Authority (FCA) does not regulate Will writing, tax and trust advice and certain forms of estate planning.