Chestnut Financial Services

Chestnut Financial Services, Financial Advisers

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Independent Financial Advisers

Solving Problems For Our Clients

Chestnut Financial Services, Financial Advisers
Independent Financial Adviser Ian Francis
Ian Francis, Independent Financial Adviser

Thinking About Inheritance Tax Advice?

Inheritance Tax (IHT) is a tax paid on your estate after you’ve died. It is payable on estates worth more than £325,000; anything below this is known as the nil-rate band and is not subject to tax. Inheritance tax is currently charged at 40% of the value of your estate which exceeds the nil-rate band.

As of April 2017 an additional £100,000 nil-rate band was introduced, which will increase each year until 2020/2021 to reach £175,000 to give a combined nil-rate band of £500,000 for individuals and a combined £1 million for married couples and civil partners. This extra nil-rate band only applies if you pass your property to direct lineal descendants.

It’s a concern for many people who want to ensure their loved ones receive maximum benefit from any inheritance. IHT rules are complicated but with careful planning, tax liabilities can be lessened.

Gifting is often an easy step that can be taken to mitigate IHT. The rules depend on the type of gift you make.

Gifts of Capital

Each person can gift £3,000 in each tax year without any IHT implications (£3,000 total and not £3,000 to each recipient). You can also make smaller gifts of up to £250 for anyone who has not received any other gift from you.

Gifts of Surplus Income

If you have surplus income, this can be gifted without any IHT consequences and there is no limit on the amount that can be gifted. There must be an intention to make gifts from your surplus income and there must also be a regular pattern of payments for example on a monthly, quarterly, or annual basis.

Gifting your Home

You may consider making a gift of your home to your children but this is rarely something that we would recommend.

If you make a gift but continue to benefit from the asset – for example, gifting your home but continuing to live in it – this will not work for IHT planning purposes. In these circumstances, you are caught by the “gift with reservation of benefit” rules. This means that regardless of whether you live for 7 years, your taxable estate will still include your home.

The only way to avoid getting caught by these rules would be to pay a full market rent for your occupation of the property. However, the rent will then be income for your children and subject to income tax.

There are other risks to gifting your property:

  • Your home would be owned by your children – they could potentially sell the property, raise a mortgage against it, move in or have a lodger.
  • If your children were to get divorced or have financial difficulties, your home would be their asset and subject to claims from spouses and creditors.
  • If your children do not live in the property then any increase in the value will be subject to capital gains tax.
  • If your children don’t already own their own home but later wish to buy somewhere, they will have to pay higher rates of stamp duty.
  • If you need care in the future and require local authority funding, they could argue that you have deprived yourself of assets and still include the value of your property in your estate in any financial assessment.
Advice delivered with care - especially for you

We're passionate, and love nothing more than helping answer our clients' questions and help solve their problems with great financial advice, regardless of your level of understanding of money matters.

Our role as independent financial advisers is simple - help you understand your options and reduce "complexity" into "simplicity".

If you have any questions, simply pick up the phone or drop us an email, we would be delighted to hear from you.

Our focus is simple - you!

All the answers you need in one place. Ensuring that money is one less thing to worry about.

What we do

We can advise you on:

  • transferring money between spouses or civil partners, which are exempt from IHT,
  • drafting or updating wills or trusts to take advantage of IHT reliefs and exemptions,
  • lifetime gifting to minimise the size of your estate and the amount of IHT liable, and
  • making gifts to charity to reduce the IHT rate.
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What it means to be SOLLA accredited

As a financial planner accredited by SOLLA (the Society of Later Life Advisers), I know that the transition to elder care happens more smoothly and is often more aligned to the expectations of the individual and their family when plans are made in advance. This includes advanced planning around finances.

It’s often a surprise to people that later-life financial planning is a specialist area within the wider field of financial advice, but it is!

Clients requiring financial planning in their later life benefit from advice that is clear and concise. Such advice comes from an adviser that is suitably qualified and experienced to advise them and manage their financial planning.

This means you can work with an expert in funding care (whether for a care home or in-home care) and other later life financial matters – ensuring that money is one less thing to worry about when arranging for your own short or long-term care, or that of a parent.

We have been advising clients on long-term care, Lasting Powers of Attorney, Will writing and retirement solutions for several years now, backed up not just by professional qualifications but also by the membership of various professional bodies, most notably the Society of Later Life Advisers (SOLLA) and the Personal Finance Society.

Our team led by Ian Francis Independent Financial Adviser
What's on your mind? Let's talk...

We offer a free, no-obligation, initial telephone consultation for new clients to answer some initial questions and help you with some first steps.

After that, we will then ask if you would like to set aside more time at a good time of day for you, when we can meet in person, on video, or by phone, whichever is most convenient for you.

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What our clients have said

"Ian couldn't have done anything better. Everything about Ian's work was tailored to what we needed.

We had many questions and Ian took time to answer them, checking that we understood each part of our 'happy financial future'.

Ian's knowledge was excellent. He was so professional and trustworthy".

Sheila, Yorkshire

Contact Us

Chestnut Financial Services Limited

2a Sadler Court, Lincoln, LN6 3RG

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Lincolnshire Police Federation

The guidance and/or advice contained within this website is subject to the UK regulatory regime. It is therefore targeted at consumers based in the UK. Chestnut Financial Services Limited. Registered in England no 9918363, 2a Sadler Court, Lincoln, LN6 3RG. Authorised and regulated by the Financial Conduct Authority.