Thanks for answering my question in making this video. I didn't realise how complicated this issue is, I'm OK with general investing, but this is on another level. I need to do a lot more research into this topic. Thanks again 👏👏👌👍
Thanks Jeff. I can’t take credit for the spreadsheet - it’s a cash flow modelling software that I use. It is possible for you to access it yourself through the online courses that I offer. Details are in the video description.
Probably going to have to watch this one a few times to get my head around it! Nothing to do with the way it's presented, just complicated! Over time more and more estates are getting dragged into IHT with fiscal drag on the limits. With that, these solutions won't just be rich people's problems - they will become needed by the middle classes more with property price increases and care home costs etc.
Hi Roger. Yes trusts can be complex things, but I’m glad you think it’s presented clearly enough. There’s certainly more money taken by the exchequer in inheritance tax than ever before.
Excellent information- thank you! I want to gift house, but remain in it until death. Dont believe I should use an absolute trust for this due to pitfalls 👍🏻
I am really exited about finding you. Can't wait for the course and also will probably wanna bring you into my master plan that I am so confused about 😂
Wow this is complicated, I'm not sure in our position a trust would be worth doing. What I'm more worried about is losing all our inheritance due to care home costs. I have a couple of friends who've recently been left with virtually nothing, due to care homes taking around £4k a month, which is more than most people earn !!!
My mum had to go into a residential care home. In March 2017 the not for profit care home quoted their weekly fee to us. She moved into the care home in April 2017, but by then the annual price had increased by 6.7% (but fees to the local authority-funded residents only increased by 2.1%). The following year (April 2018) my mum's fees increased by 7.99% to over £851 per week (over £44,373per year). My mum had to sell her house in London to pay for care fees. She hated being in the care home. With her money, I was able to take out an immediate care fees annuity at a cost of £176,000. This paid for about 3/4 of her weekly care fees bill, but I selected the option for it to rise by 10% per year. Next with her money I bought her a bungalow and then paid for it to be adapted. I then arranged for an agency to provide a professional carer to stay with her for 22 hours a day (paid for by the annuity) for less than the cost of the care home. Extra costs were the cost of someone to sit with my mum 2 hours a day, the cost if food, utilities and council tax and income tax on 50% of the value of the monthly annuity (because the care agency is not registered with the CQC). Her savings fell below £14,000 - at this point the local authority is meant to pay for her care costs - but they did a spurious assessment and (I assume because they don't have much money) decided that she did not need a live in carer!! I was also told that it was cheaper for them to pay for someone to be in a residential care home than to pay for 4 visits a day (4 x 30 minutes). So I have not pursued it and she receives nothing from the local authority. In 2016 a "Competition and Markets Authority" investigation concluded that "self-funders" in care homes were subsidising "state-funded" residents. Damien Green admitted it. Matt Hancock decided the report was wrong. Every year the subsidy increases. My mum is 91 this week and from the 1st February her after tax annuity will fully cover the cost of her 22 hour a day carers AND her pension will cover all her costs. Finally I am confident she won't run out of money and that I or my son will inherit her bungalow. It saddened me that our society was unwilling to pay an extra 1.25% on National insurance to prevent families from being wiped out financially. Hopefully one day care fees for everyone unfortunate enough to incur them will be funded by the state (ie by all of us).
It’s all about the planning and protecting assets,Trusts do work to protect assets in this scenario and can avoid losing home.care annuity can provide very high level of income to provide sufficient income to meet needs £100k could provide £30k per annum for life for someone in their middle early 80s if they have left it too late. Seek advice the answer is out there.
Hi Chris , a brilliant video explaining trusts for IHT. Would it be worth further building to talk about if an outright gift ( like a property) the settlor can no longer benefit from the asset for it to be treated as a PET eg they can no longer live in the property or they need to pay market rent . Also when making an outright gift there is something called a Gift in Vitro which is like an added insurance if the settlor dies within 7 years of gifting, it will be payed by the insurance.
Yes that’s right - giving something away but then continuing to benefit from it is called a gift with reservation and leads to a failed PET. The type of policy you’re describing is called a gift inter vivos plan. It’s a special type of decreasing term assurance. Few providers actually offer them these days, but it’s quite easy to replicate what one of these plans does with a combination of short term level and decreasing term assurance.
Hi Chris, sorry I'm late to the party but glad I made it. Absolutely 1st class videos thank you for all your valuable knowledge, will need to study them in a bit more detail. You mentioned in one of them, that your client base is totally full...which is very understandable. Is there any good planners around my neck of the woods...Ayrshire/Glasgow way? Cheers Jim
Hi Ratna. Much would depend on the type of trust, the size of the gift, the complexity of the estate and other factors, so it isn’t possible to say exactly. A small settlement of say £50k-100k into an off the shelf trust with no other gifts and complications may cost in the region of £1k-£3k set up, but again, that is just a very rough guide. Larger settlements will cost more, but you can see from the video how much of a difference to taxation they can make.
Hi Chris, thank you, you explained such a complex issues very well. The concepts are brilliant but why is it so expensive to set it up with the 20 years investment bond, the ongoing fees that would cost at least over 30% of the amount you surrender in total ? Is there a guarantee that such scheme would not be challenged by HMRC?
@ Chris Bourne Hi, I hope this finds you well. Is it still the intent to provide a Voyant Master Class course as well as provide access to the Voyant Go software ?
It certainly is Neil. Course to be launched very soon and announcement will be sent to mail list subscribers. Make sure you have signed up for updates using the site address details in the video description.
IHT is less likely to be a problem at that level, providing the estate being passed is coming from the last survivor of a married couple, and the value of the estate includes a main residence that is being passed to children (or grandchildren).
To a solicitor. Financial advisers often have an understanding and can implement ‘off the shelf’ trusts such as the ones discussed in this video, but anything more bespoke generally is a solicitor’s domain.
Do any IFA's charge fees on the profits they make you rather than on your whole pension pot. It seems unfair to me that an IFA gets money even when they are loosing you money.
No IFA would only charge when your investment increases in value because they do not control the way markets move, meaning they would have no control over their income and a business cannot be operated that way. You have to disassociate what an IFA does from the way investments move though - implementing investments is a very small part of a good adviser’s process. The adviser should be able to advise upon the most tax efficient withdrawal strategy by A/B testing different scenarios against each other using cash flow modelling, illustrate how goals can be achieved regardless of market conditions so you can retire in complete confidence, protect wealth for subsequent generations and much more. Investments are just a byproduct, but an adviser’s liability is connected to the amount of money that they are advising upon, so they have to charge fees in relation to the investment.
Haha yes despite my trying to make things as straightforward as possible, it’s quite difficult with trust taxation 😂 The only thing I can recommend is advice.
I am dealing with a trust estate now, the wording makes it seem very complicated but in essence it's fairly straightforward. You've done a very good job of explaining the scenarios.
Good basic introduction to taxation + Trusts. Always remember the reduction in IHT rates starting 3 years after transfer only applies , I believe, for sums over the £ 325,000 IHT allowance. Beware a Loan Trust I am aware of was subject to 30% tax because the beneficiaries were higher rate taxpayers. This may have been through Capital Gains Tax as the Trust had appreciated 600% over 30 years. It may be possible for the trust to alter the beneficiaries to a lower/non tax payer otherwise a saving of only 10% IHT is made and the Trust Administrators have chargerd 30% (30 years x1%).
Hi Chris. Absolutely love your videos so a big thank you from me. A question about pensions being free from IHT - this seems to be the case up until the age of 75, but what happens after this? I cannot find any details? So, for clarity, if at 74 you have a personal pension pot of 500,000 and you die, this could be passed to your child (as a pension pot presumably, not a lump sum) without being valued as part of your estate. But at 75 and after… does it incur full IHT at 40%? The information out there seems to go blank after 75 - your knowledge on this would be greatly appreciated! Thank you in advance!
Hi there. A defined contribution pension will always be free of IHT at any age. It is before age 75 that benefits can be passed to beneficiaries without those benefits being subject to income tax in the beneficiary’s hands. After 75, the beneficiary would pay tax on withdrawals at their marginal income tax rate.
Hi Chris, great video. Really useful. Quick question, if a trust is set up for your children to benefit from, based on your house, does that mean they are not classed as first time buyers due to a property being left in trust for them?
Hi Alan. Holding property in trust is an area where legal advice is required. A trust is an entity though and if a discretionary trust is the owning entity rather than the individuals, the individuals themselves don’t own the property. Perhaps that answers the question, but bespoke trusts from legal professionals are what may be required.
Amazing video and interested information regarding Discretionary Trust. My eldest brother is making my mother take out a trust and he won't disclose any information to the other siblings. I feel it might be a discretionary trust with himself being named as the trustee. A discretionary trust with him as the trustee would enable him to change the beneficiaries and exclude us from any inheritance? Is this possible? Does the DT over ride a Will? The Will does leave everything in equal share to all siblings but sadly my eldest brother won't accept that. Thanks
Thank you. It’s always sad to hear of situations like this. A trust will generally override a will, but they can be challenged, especially if it is believed (and can be proven) that the settlor has been forced to do something against their wishes.
Hi Chris, I have a discretionary trust done last year done by my wealth planner. I have heard before that a solicitor should be doing the trust. Can I open another type of trust with a solicitor?
Hi Kristen. A trust doesn’t necessarily have to be implemented by a solicitor - suitably qualified financial planners can put trusts in place. The important thing is that they are appropriate and meet the needs of you as the settlor.
Excellent video Chris. Looking forward to the income tax and pensions video. Hoping you will cover something around maximising tax benefits over 2 years if you can’t eliminate the 61.25% rate with the £40k annual allowance.
Off the top of my head I don’t think they specifically are, but the system is generally flexible enough to be able to create the desired result in projections.
Hi chris, great video as always. I can’t help thinking these trust arrangements are borderline immoral and a cast iron method for the rich to get richer using professionally employed staff to untangle the labyrinthine complexity of trust tax law. But that’s just my personal opinion. Anyway my wife actually has a trust fund set up for her. She has only just been told about it and she is in her 40’s ! . We have no idea how it works and how we access it! and what the tax implications are . It’s a bare trust….I think? can I hire you 😂😂. I’m guessing your very busy?
Hi there! Apologies for the delayed response… A bare trust can be accessed at any time by somebody who has reached the age of majority. You can certainly get in touch if you feel you need advice. My contact email address is shown in the About section of my channel homepage.
" I can’t help thinking these trust arrangements are borderline immoral" - the legal and tax structures are in place and can be used by any and everyone. I'm sure you don't have a similar puritanical tone about your income tax personal allowance, you haven't written to HMRC and insisted they don't apply it to you. The tax benefits of Pensions and ISA, again I'm sure you don't have a moral opinion on using them yourself. So to try to take some assumed moral high ground about using Trusts (or any other tax efficient methodologies) to mitigate tax, is really at best absurd and at worst a case of double-standards.
Thank you for this excellent video! There’s far too much information as I have much less understanding of IHT issues than the usual pension/ISA/stock market basics that most people have! Please break this down further- for eg, why don’t we all open a loan trust and live off it for 25 or 30yrs? Can the trust money be invested in the markets and what are the tax implications of that growth?
Thank you. Yes the trust assets would generally be invested in the same sorts of funds as your ISAs and pensions are, usually through an investment bond. The main reason that not everyone uses a loan trust is because they still wish to retain access to the growth on their investments. In a loan trust, you retain access to the capital but lose access to the growth. So if you invested £100k, you could only take back £100k… the growth belongs to the beneficiaries. Many people do use loan trusts though when they move into retirement.
@@chrisbourne-retirementplanner Thank you, Chris, for that patient explanation. Looking forward to more videos on this subject. Very few people I know are well-informed about IHT planning as we ought to be..
Great video as always. I was interest to hear of the proposed Voyant masterclass, do you have any overview, any spoilers.. i.e. is to be a one off or a series? will access to Voyant be part of the offering? When is it expected to be available? Many thanks
Thanks Neil. Aiming for late Feb on the course. It will include Voyant user license. Are you signed up to my mail list in the description? You’ll receive updates on there.
How to protect your asset and who will be in charge or beneficiary of the company when the sole director shareholder dies? What happens to those investment in the company and mortgages ? Please can you make a video of that and advise what to do to avoid the disaster of looking everything? Thank you. I love your videos posted 👍
Can you put a family home into a trust for you children when you have an outstanding mortgage on the property or do you need to wait until you have paid the mortgage off in full ?
Hi Chris. Should I seek professional advise from a solicitor to select the correct Trust for my mums estate and get them to set it up for me, or can I seek your professional advise using your IHT calculator to select the correct Trust for me regarding inheriting my mothers estate?
Hi Larry. The video may provide a guide to what certain trusts can do, but you should always take advice from a solicitor or an IFA who specialises in estate planning. Both advisers would be complementary - an effective will should be in place through a solicitor. They are unable to implement investments into things like bonds though; you need an IFA for that.
Hi Chris I'm looking to buy a bungalow and thinking about renting out my current property for 2 to 3 years until the market recovers when I can get a better price, I know if I sell my current property within 3 years I can claim back the extra 3% stamp duty I would of paid but will I then have to pay CGT on that sale as it was a rental property?
Great vid, question. If the estate contains ONLY 2 properties and 1 being a place of residence of the total value of 2.3million. No cash, no stocks or bonds just 2 properties. What's the best trust to use as she has 2 children aged in their 40s to avoid IHT ?
Hi Chris . Excellent as always . Would it be worth putting my main residence into a trust along with 2 pensions . The kids could stick the house on rent but be protected from any future liability eg divorce,bankruptcy etc.
Pensions are already outside of your estate for IHT so are effectively already in a trust. if you place your house into trust you no longer own the property as it will be owned by the trustees. In addition, the residential nil rate band (RNRB) would not apply if the property was placed into a discretionary settlement. One thing to also bear in mind is if you continue to live in the house then this will be classed as a 'gift with reservation' and the gift would 'fail' unless you paid the market value of rent to the trustees, however this would then further increase the complexity of the arrangement with the trustees then needing to complete a self assessment tax return. This is like Chris says a highly complex area and legal advice should be sought despite the upfront cost. I hope this helps.
@@chrisbourne-retirementplanner Thanks Chris, it is good to know I am on the right tracks! I am studying for APFS at the moment and find considerable value in the content you produce.
i have to wonder who thought of all this :} these mechanisms are there i suppose to stop people leaving it all to the cats home, myself i will be left zilch Hall :} Excellent video Chris ,thanks
Thanks Max. Haha the tax system is a mess of layered legislation over decades and decades. It keeps me in a job I suppose. Leaving money to the cats home isn’t a bad strategy! As long as it’s a register charity you completely avoid IHT on the gift.
@@chrisbourne-retirementplanner Hello again Chris yes i subbed to your channel ages ago, after looking for stuff on pensions, i did get my FAS money lump sum ,which i used to pay down my debts , i started investing back end of 2020 so missed out on the market muddy bottom :} i aim to put in more cash ,when it becomes possible in the spring, i have got to get the ball rolling :} somehow :} thanks once again is there a Battersea cats home?:}
Thanks for answering my question in making this video. I didn't realise how complicated this issue is, I'm OK with general investing, but this is on another level. I need to do a lot more research into this topic. Thanks again 👏👏👌👍
My pleasure Paul. Thanks for your question. Let me know if there are any other areas you’d like to see covered in future videos.
Offshore trusts maybe??
I mainly watch for your stock market videos but thought I'd give this a watch as it's useful stuff to know. My mind is blown!
Thanks Duncan… hopefully not too complex! It’s certainly one that may need a few watches.
Fantastic video as always, you have a superb way of breaking down complex information, thanks Chris.
Thanks for watching! I’m really pleased that it’s valuable.
I like the way you have explained it and your spreadsheet looked very professional
Thanks Jeff. I can’t take credit for the spreadsheet - it’s a cash flow modelling software that I use. It is possible for you to access it yourself through the online courses that I offer. Details are in the video description.
Probably going to have to watch this one a few times to get my head around it! Nothing to do with the way it's presented, just complicated! Over time more and more estates are getting dragged into IHT with fiscal drag on the limits. With that, these solutions won't just be rich people's problems - they will become needed by the middle classes more with property price increases and care home costs etc.
Hi Roger. Yes trusts can be complex things, but I’m glad you think it’s presented clearly enough. There’s certainly more money taken by the exchequer in inheritance tax than ever before.
Excellent information- thank you! I want to gift house, but remain in it until death. Dont believe I should use an absolute trust for this due to pitfalls 👍🏻
Hi there. If you gift your house but continue to live in it rent free, it will be viewed as a ‘gift with reservation’, and will remain in your estate.
I am really exited about finding you. Can't wait for the course and also will probably wanna bring you into my master plan that I am so confused about 😂
That’s great thank you! You won’t have to wait too much longer 🙂
Wow this is complicated, I'm not sure in our position a trust would be worth doing. What I'm more worried about is losing all our inheritance due to care home costs. I have a couple of friends who've recently been left with virtually nothing, due to care homes taking around £4k a month, which is more than most people earn !!!
Modern day robbery .
My mum had to go into a residential care home. In March 2017 the not for profit care home quoted their weekly fee to us. She moved into the care home in April 2017, but by then the annual price had increased by 6.7% (but fees to the local authority-funded residents only increased by 2.1%).
The following year (April 2018) my mum's fees increased by 7.99% to over £851 per week (over £44,373per year). My mum had to sell her house in London to pay for care fees. She hated being in the care home. With her money, I was able to take out an immediate care fees annuity at a cost of £176,000. This paid for about 3/4 of her weekly care fees bill, but I selected the option for it to rise by 10% per year.
Next with her money I bought her a bungalow and then paid for it to be adapted.
I then arranged for an agency to provide a professional carer to stay with her for 22 hours a day (paid for by the annuity) for less than the cost of the care home.
Extra costs were the cost of someone to sit with my mum 2 hours a day, the cost if food, utilities and council tax and income tax on 50% of the value of the monthly annuity (because the care agency is not registered with the CQC).
Her savings fell below £14,000 - at this point the local authority is meant to pay for her care costs - but they did a spurious assessment and (I assume because they don't have much money) decided that she did not need a live in carer!! I was also told that it was cheaper for them to pay for someone to be in a residential care home than to pay for 4 visits a day (4 x 30 minutes). So I have not pursued it and she receives nothing from the local authority.
In 2016 a "Competition and Markets Authority" investigation concluded that "self-funders" in care homes were subsidising "state-funded" residents. Damien Green admitted it. Matt Hancock decided the report was wrong.
Every year the subsidy increases.
My mum is 91 this week and from the 1st February her after tax annuity will fully cover the cost of her 22 hour a day carers AND her pension will cover all her costs. Finally I am confident she won't run out of money and that I or my son will inherit her bungalow.
It saddened me that our society was unwilling to pay an extra 1.25% on National insurance to prevent families from being wiped out financially.
Hopefully one day care fees for everyone unfortunate enough to incur them will be funded by the state (ie by all of us).
Yes long term care planning and estate planning often go hand in hand. There are things that can be done, but it’s often left too late.
It’s all about the planning and protecting assets,Trusts do work to protect assets in this scenario and can avoid losing home.care annuity can provide very high level of income to provide sufficient income to meet needs £100k could provide £30k per annum for life for someone in their middle early 80s if they have left it too late. Seek advice the answer is out there.
@@mikeroyce8926yes care for all in 4 star hotels with boat people
Hi Chris , a brilliant video explaining trusts for IHT. Would it be worth further building to talk about if an outright gift ( like a property) the settlor can no longer benefit from the asset for it to be treated as a PET eg they can no longer live in the property or they need to pay market rent . Also when making an outright gift there is something called a Gift in Vitro which is like an added insurance if the settlor dies within 7 years of gifting, it will be payed by the insurance.
Yes that’s right - giving something away but then continuing to benefit from it is called a gift with reservation and leads to a failed PET. The type of policy you’re describing is called a gift inter vivos plan. It’s a special type of decreasing term assurance. Few providers actually offer them these days, but it’s quite easy to replicate what one of these plans does with a combination of short term level and decreasing term assurance.
Hi Chris, sorry I'm late to the party but glad I made it. Absolutely 1st class videos thank you for all your valuable knowledge, will need to study them in a bit more detail. You mentioned in one of them, that your client base is totally full...which is very understandable. Is there any good planners around my neck of the woods...Ayrshire/Glasgow way? Cheers Jim
Hi Jim. Drop me an email on the email address in the About section of my site and I’ll see if I can guide you in the right direction.
Excellent video as always. Many thanks.
Much appreciated John. Thanks for watching!
Hi Chris. I have been looking into private trusts as opposed to statutory trusts. Do you have knowledge of this?
Did you talk about Family Inheritance trust?
The best way to avoid IHT is to open up a 'composite prednisone actuarial' account at any high street bank, you only need to put £1 in
Great Video Chris! My main question would be the cost of these trusts, how much to set up and what are the ongoing fees?
Hi Ratna. Much would depend on the type of trust, the size of the gift, the complexity of the estate and other factors, so it isn’t possible to say exactly. A small settlement of say £50k-100k into an off the shelf trust with no other gifts and complications may cost in the region of £1k-£3k set up, but again, that is just a very rough guide. Larger settlements will cost more, but you can see from the video how much of a difference to taxation they can make.
Hi Chris, thank you, you explained such a complex issues very well. The concepts are brilliant but why is it so expensive to set it up with the 20 years investment bond, the ongoing fees that would cost at least over 30% of the amount you surrender in total ? Is there a guarantee that such scheme would not be challenged by HMRC?
Hi there. Where are you taking those costs from?
Great info.
Thank you! Glad it’s helpful.
@ Chris Bourne Hi, I hope this finds you well. Is it still the intent to provide a Voyant Master Class course as well as provide access to the Voyant Go software ?
It certainly is Neil. Course to be launched very soon and announcement will be sent to mail list subscribers. Make sure you have signed up for updates using the site address details in the video description.
Would you be able to give advice for smaller estates, for example just under 1 million. Or would inheritance tax not be a problem at that level
IHT is less likely to be a problem at that level, providing the estate being passed is coming from the last survivor of a married couple, and the value of the estate includes a main residence that is being passed to children (or grandchildren).
Exactly what I want
Good to hear! Thank you.
A basic question, where can I go to open a trust?
To a solicitor. Financial advisers often have an understanding and can implement ‘off the shelf’ trusts such as the ones discussed in this video, but anything more bespoke generally is a solicitor’s domain.
Thanks
what software are you using that is keeping track of this
it seems to be your own, neat
It’s called Voyant. Check it out my courses in the video description.
Im assuming this is Public trust . Not private
The video describes individual trust products.
Do any IFA's charge fees on the profits they make you rather than on your whole pension pot. It seems unfair to me that an IFA gets money even when they are loosing you money.
No IFA would only charge when your investment increases in value because they do not control the way markets move, meaning they would have no control over their income and a business cannot be operated that way. You have to disassociate what an IFA does from the way investments move though - implementing investments is a very small part of a good adviser’s process. The adviser should be able to advise upon the most tax efficient withdrawal strategy by A/B testing different scenarios against each other using cash flow modelling, illustrate how goals can be achieved regardless of market conditions so you can retire in complete confidence, protect wealth for subsequent generations and much more. Investments are just a byproduct, but an adviser’s liability is connected to the amount of money that they are advising upon, so they have to charge fees in relation to the investment.
How do i contact this guy by email or phone?
Hi there. My contact details are in the About section of my channel homepage.
@@chrisbourne-retirementplanner thank you. I'll email you week coming
This loophole is why DJ tRump doesn't want his adjustable trust looked at by the public or authorities!
Jesus Chris 🤣🤣🤣...might have to watch this a million times. Any chance for a simple trust under 500K? Recommendation...
Haha yes despite my trying to make things as straightforward as possible, it’s quite difficult with trust taxation 😂 The only thing I can recommend is advice.
Will any of this survive this money grabbing new Labour government?
I am dealing with a trust estate now, the wording makes it seem very complicated but in essence it's fairly straightforward. You've done a very good job of explaining the scenarios.
Thank you, glad you think so.
Mate how are you doing? Looking for new videos from you... 😊
Good basic introduction to taxation + Trusts. Always remember the reduction in IHT rates starting 3 years after transfer only applies , I believe, for sums over the £ 325,000 IHT allowance. Beware a Loan Trust I am aware of was subject to 30% tax because the beneficiaries were higher rate taxpayers. This may have been through Capital Gains Tax as the Trust had appreciated 600% over 30 years. It may be possible for the trust to alter the beneficiaries to a lower/non tax payer otherwise a saving of only 10% IHT is made and the Trust Administrators have chargerd 30% (30 years x1%).
Hi Chris. Absolutely love your videos so a big thank you from me. A question about pensions being free from IHT - this seems to be the case up until the age of 75, but what happens after this? I cannot find any details? So, for clarity, if at 74 you have a personal pension pot of 500,000 and you die, this could be passed to your child (as a pension pot presumably, not a lump sum) without being valued as part of your estate. But at 75 and after… does it incur full IHT at 40%? The information out there seems to go blank after 75 - your knowledge on this would be greatly appreciated! Thank you in advance!
Hi there. A defined contribution pension will always be free of IHT at any age. It is before age 75 that benefits can be passed to beneficiaries without those benefits being subject to income tax in the beneficiary’s hands. After 75, the beneficiary would pay tax on withdrawals at their marginal income tax rate.
Hi Chris, great video. Really useful. Quick question, if a trust is set up for your children to benefit from, based on your house, does that mean they are not classed as first time buyers due to a property being left in trust for them?
Hi Alan. Holding property in trust is an area where legal advice is required. A trust is an entity though and if a discretionary trust is the owning entity rather than the individuals, the individuals themselves don’t own the property. Perhaps that answers the question, but bespoke trusts from legal professionals are what may be required.
Helpful video ✅
What was that Income Tax Planning with pensions video cslled in the end? Is there a link to it?
You mentikned atbthe end as forthcoming.
Brilliant video Chris..........thanks again
Very welcome. Thank you 👍🏼
Amazing video and interested information regarding Discretionary Trust. My eldest brother is making my mother take out a trust and he won't disclose any information to the other siblings. I feel it might be a discretionary trust with himself being named as the trustee. A discretionary trust with him as the trustee would enable him to change the beneficiaries and exclude us from any inheritance? Is this possible? Does the DT over ride a Will? The Will does leave everything in equal share to all siblings but sadly my eldest brother won't accept that. Thanks
Thank you. It’s always sad to hear of situations like this. A trust will generally override a will, but they can be challenged, especially if it is believed (and can be proven) that the settlor has been forced to do something against their wishes.
Hi Chris, I’ve just subscribed. When is “Voyant” (spelling?) Master class video being released on TH-cam? Great videos by the way. Many thanks
Hi Paul. Thanks for joining the courses I hope they’ll be valuable.
Hi Chris, I have a discretionary trust done last year done by my wealth planner. I have heard before that a solicitor should be doing the trust. Can I open another type of trust with a solicitor?
Hi Kristen. A trust doesn’t necessarily have to be implemented by a solicitor - suitably qualified financial planners can put trusts in place. The important thing is that they are appropriate and meet the needs of you as the settlor.
Excellent video Chris. Looking forward to the income tax and pensions video. Hoping you will cover something around maximising tax benefits over 2 years if you can’t eliminate the 61.25% rate with the £40k annual allowance.
Thanks Martin. There are some options to help with that, which I will cover in future vids.
Great video Thanks Chris - are flexible revisionary trusts included in the tool you used please thanks
Off the top of my head I don’t think they specifically are, but the system is generally flexible enough to be able to create the desired result in projections.
Hi chris, great video as always. I can’t help thinking these trust arrangements are borderline immoral and a cast iron method for the rich to get richer using professionally employed staff to untangle the labyrinthine complexity of trust tax law. But that’s just my personal opinion. Anyway my wife actually has a trust fund set up for her. She has only just been told about it and she is in her 40’s ! . We have no idea how it works and how we access it! and what the tax implications are . It’s a bare trust….I think? can I hire you 😂😂. I’m guessing your very busy?
Hi there! Apologies for the delayed response… A bare trust can be accessed at any time by somebody who has reached the age of majority. You can certainly get in touch if you feel you need advice. My contact email address is shown in the About section of my channel homepage.
" I can’t help thinking these trust arrangements are borderline immoral" - the legal and tax structures are in place and can be used by any and everyone. I'm sure you don't have a similar puritanical tone about your income tax personal allowance, you haven't written to HMRC and insisted they don't apply it to you. The tax benefits of Pensions and ISA, again I'm sure you don't have a moral opinion on using them yourself. So to try to take some assumed moral high ground about using Trusts (or any other tax efficient methodologies) to mitigate tax, is really at best absurd and at worst a case of double-standards.
Thank you for this excellent video! There’s far too much information as I have much less understanding of IHT issues than the usual pension/ISA/stock market basics that most people have!
Please break this down further- for eg, why don’t we all open a loan trust and live off it for 25 or 30yrs? Can the trust money be invested in the markets and what are the tax implications of that growth?
Thank you. Yes the trust assets would generally be invested in the same sorts of funds as your ISAs and pensions are, usually through an investment bond. The main reason that not everyone uses a loan trust is because they still wish to retain access to the growth on their investments. In a loan trust, you retain access to the capital but lose access to the growth. So if you invested £100k, you could only take back £100k… the growth belongs to the beneficiaries. Many people do use loan trusts though when they move into retirement.
@@chrisbourne-retirementplanner Thank you, Chris, for that patient explanation.
Looking forward to more videos on this subject. Very few people I know are well-informed about IHT planning as we ought to be..
Great video as always. I was interest to hear of the proposed Voyant masterclass, do you have any overview, any spoilers.. i.e. is to be a one off or a series? will access to Voyant be part of the offering? When is it expected to be available? Many thanks
Thanks Neil. Aiming for late Feb on the course. It will include Voyant user license. Are you signed up to my mail list in the description? You’ll receive updates on there.
Thanks Chris, yes signed up for the newsletter but no confirmation or letter received to date. Should I re register with another email address.
Thanks for the informative video. How do we get Voyant?
Hi there. The link to my Voyant course, which includes access to the software, can be found in the video description.
Links in comments don’t always post, but I will try… voyant-masterclass.mykajabi.com
How to protect your asset and who will be in charge or beneficiary of the company when the sole director shareholder dies? What happens to those investment in the company and mortgages ? Please can you make a video of that and advise what to do to avoid the disaster of looking everything? Thank you. I love your videos posted 👍
Another fabulous video.
Well done 🥰🥰🥰🥰🥳🥂👍🕺🏽
Thanks again Lawrence. I appreciate your support of my channel 👍🏼
@@chrisbourne-retirementplanner Government making it harder and harder for people with large portfolios.
Iam 43 and worried about IHT all ready 🙊🙈🙉😱🤔
That was a vwey good video Chris!
I studied trusts when I did my ACCA exminations and understood nothing. I learnt more in this short video.
Can you put a family home into a trust for you children when you have an outstanding mortgage on the property or do you need to wait until you have paid the mortgage off in full ?
Really useful video Chris.
Thank you Shree, I’m glad it is.
great video
Thank you 🙏🏻
Be aware that if you rent a property out that is in trust there is a high rate of tax to be paid.
About 31% I think.
When is the voyant app going live?
Hi there. It's live - link is in the description.
Here it is if you can't find... voyant-masterclass.mykajabi.com/
Hi Chris. Should I seek professional advise from a solicitor to select the correct Trust for my mums estate and get them to set it up for me, or can I seek your professional advise using your IHT calculator to select the correct Trust for me regarding inheriting my mothers estate?
Hi Larry. The video may provide a guide to what certain trusts can do, but you should always take advice from a solicitor or an IFA who specialises in estate planning. Both advisers would be complementary - an effective will should be in place through a solicitor. They are unable to implement investments into things like bonds though; you need an IFA for that.
Hi Chris I'm looking to buy a bungalow and thinking about renting out my current property for 2 to 3 years until the market recovers when I can get a better price, I know if I sell my current property within 3 years I can claim back the extra 3% stamp duty I would of paid but will I then have to pay CGT on that sale as it was a rental property?
Hi Mervyn. I believe there would need to be some CGT time apportionment for the period that the property was not your main residence.
Great vid, question. If the estate contains ONLY 2 properties and 1 being a place of residence of the total value of 2.3million. No cash, no stocks or bonds just 2 properties. What's the best trust to use as she has 2 children aged in their 40s to avoid IHT ?
Placing property into trusts requires the guidance of solicitors. You have to be careful about gifts with reservation.
@chrisbourne-taxfreeinvesti9688 oh thanks .. I've already started looking into solicitors as it seems quite complex
Hi Chris . Excellent as always . Would it be worth putting my main residence into a trust along with 2 pensions . The kids could stick the house on rent but be protected from any future liability eg divorce,bankruptcy etc.
Pensions are already outside of your estate for IHT so are effectively already in a trust. if you place your house into trust you no longer own the property as it will be owned by the trustees. In addition, the residential nil rate band (RNRB) would not apply if the property was placed into a discretionary settlement. One thing to also bear in mind is if you continue to live in the house then this will be classed as a 'gift with reservation' and the gift would 'fail' unless you paid the market value of rent to the trustees, however this would then further increase the complexity of the arrangement with the trustees then needing to complete a self assessment tax return. This is like Chris says a highly complex area and legal advice should be sought despite the upfront cost.
I hope this helps.
Hi Bob, many thanks for your comment. I agree with everything Bailey has written above and can’t add anything further.
@@chrisbourne-retirementplanner Thanks Chris, it is good to know I am on the right tracks! I am studying for APFS at the moment and find considerable value in the content you produce.
i have to wonder who thought of all this :} these mechanisms are there i suppose to stop people leaving it all to the cats home, myself i will be left zilch Hall :}
Excellent video Chris ,thanks
Thanks Max. Haha the tax system is a mess of layered legislation over decades and decades. It keeps me in a job I suppose. Leaving money to the cats home isn’t a bad strategy! As long as it’s a register charity you completely avoid IHT on the gift.
@@chrisbourne-retirementplanner Hello again Chris yes i subbed to your channel ages ago, after looking for stuff on pensions, i did get my FAS money lump sum ,which i used to pay down my debts , i started investing back end of 2020 so missed out on the market muddy bottom :} i aim to put in more cash ,when it becomes possible in the spring, i have got to get the ball rolling :} somehow :} thanks once again is there a Battersea cats home?:}
What about private trusts Chris?
Enjoying your videos 👍 My question is… How do you know when you should be speaking to a financial planner? Thanks
Hi Simon. Thank you! I actually did a video on this subject a while back called When You DON’T Need Financial Advice. You may find that useful.
There is a lot to think about, what age should you start planning ?
At age of zero years
Start planning straight away, but don’t give away today for tomorrow… It’s a difficult balance to strike!