THE TAX PLANNING SERVICE BY SOTERIA TRUSTS
Tax planning is not a service only for the wealthy. Rising property prices mean that without proper planning, most people will fall into the IHT net when they die. That means their loved ones will have to pay a 40% Inheritance Tax on the total net value of assets over £325,000, or £650,000, depending on their marital status. Assets subject to IHT include property, businesses, cash and investments, and life insurance policies not written into trust.
“Your loved ones
may have to pay
40% Inheritance Tax
Tax following your death”
Tax Planning Service
At Soteria Trusts, we are not only concerned about the ‘here and now’ but also for your future and beyond your lifetime.
Arrange a free Tax Planning consultation with one of our advisersFIVE MAIN UK PROPERTY-RELATED TAXES
The Soteria Tax Planning Service was developed to assist with reducing or mitigating the five main taxes associated with being a UK tax resident or being classed as a UK long-term resident.
1 Income Tax
From 20 - 45% per annum of property rental.
2 Stamp Duty Land Tax
Up to 19% of the residential transaction value.
3 Capital Gains Tax
24% of gains made on property from April 2015. Other investment gains are charged at 20%.
4 Annual Tax on Enveloped Dwellings
From £4,400 - £287,500 per annum.
5 Inheritance Tax
40% of value of net estate over Nil Rate Bands (NRB’s) of £325,000 for singles & £650,000 for couples.
Calculate your IHT: IHT Calculator
IHT PLANNING SOLUTIONS - WAYS TO REDUCE IHT
Protecting your wealth is the goal of Soteria’s Tax Planning Service. We will guide you through the planning process and advise you on the best possible solutions tailored to your specific needs. To give you an overview of the Tax Planning Service and its various strategies, we have a checklist of things that you can do to reduce your taxes during your lifetime and after death.
Make a Will
The starting point for any Estate and Inheritance Tax plan is to have a Will in place. Not only does it avoid any future family conflict, but an effective Will can also help your beneficiaries reduce the overall tax liability of your estate.
TRUST and contract-based Retirement PLANS – QNUPS
Pensions that meet the criteria of being a registered pension and QNUPS as defined by ‘HMRC’ are currently exempt from IHT following a member's death. The Trust ensures that the pension assets (your contributions) are kept separate from those of other members and are exempt from CGT once held within the pension.The PCC of a contract based plan achieves the same thing. From April 2027 things are changing and any unused funds within a UK registered pension scheme and QNUPS, will form part of the deceased's estate and be liable to IHT.
SDLT Refunds
Obtaining a refund of SDLT paid as part of a property transaction that took place up to 4 years ago, also forms part of the Tax Planning Service. With as many as 1 in 4 property transactions in the UK making an overpayment, Soteria Trusts can help you reclaim overpaid Stamp Duty Land Tax. Subject to satisfying certain criteria, reclaims can be for as much as 70% of what was originally paid. Learn more about SDLT Returns here.
PUT YOUR ASSETS IN A TRUST
Trusts have been used for centuries to protect assets from creditors, taxes and probate. The cash, investments, pensions, and property that are held in the trust, legally belong to the Trustee, who, acting on your instructions, can transfer the assets to your beneficiaries whenever you want them to have them. Learn more about how Trusts work here.
UK Domicile vs UK Non-Domicile vs Long Term Residence (LTR)
From April 2025, the UK will shift to a residence-based regime for Inheritance Tax (IHT). Currently, UK-domiciled individuals are taxed on all global assets at 40% above the Nil Rate Bands (NRB), while non-UK domiciles pay IHT only on UK assets. Under the new rules, individuals who have lived in the UK for 10 out of the last 20 years (Long Term Residents) will have both UK and international assets subject to IHT. Those who leave the UK after being LTR will remain liable for IHT on non-UK assets for up to 10 years. Non-residents for 10+ years will only pay IHT on UK assets.
Soteria Trusts currently offers four types of trust accounts:
Tax Planning Service Guide
Download Soteria’s Tax Planning Guide for more information and real-life examples of tax mitigation strategies and success stories.
UK Tax Allowances
There are certain tax allowances you could use to reduce the value of your estate and the IHT bill. For example, if you pass on a home to your spouse or civil partner, there is no IHT liability, but if you leave it to another person who is not a direct descendant, then IHT will apply.
Gifts during your lifetime
Another tax allowance that can decrease your estate’s value, and IHT as a result, is an allowance for gifts of up to £3,000 each tax year. Gifts exempt from IHT can include cash, property, valuable possessions, such as jewellery or art. Gifts don’t count towards the value of your estate after seven years.
Company Formation
Corporate structures are often set up to hold assets such as physical property and can reduce certain personal taxes, such as Income Tax and Capital Gains Tax. Corporate structures, such as UK and offshore limited companies are not effective when it comes to IHT. If you already hold assets in a corporate structure they may not be as tax efficient as you think. Contact us for a review of your holdings, and we can advise on the most efficient ways to legitimately reduce your IHT liability.
Tax Planning Service
The rules surrounding IHT are complex and changing all the time and there is no one solution that fits all. As everyone's circumstances are different, we recommend seeking advice from a professional tax adviser or financial planner who understands IHT and the complexities around efficient and robust Estate Planning. Contact us for a free consultation today.Tax Planning Guide for non-UK Residents
Download this guide for more information about tax liabilities for non-UK residents.
