At Haven IFA, many people come to us for advice on their financial situations and pension matters. Our expertise has established strong relationships with several clients who have walked through our doors – including those seeking help for other people they know.

One of our long-standing clients recently reached out to us requesting a favour. The help he was seeking was not for himself but for his elderly parents. Concerned over their savings and investments, the client requested that our advisers meet with his parents to lookover their financials which had not received attention for quite some time.

The main concern that the client had was around the potential passing of his father, leaving his mother with no understanding of the savings, where they were and how to access them.

Our adviser set a time and met with the parents, overlooking all the savings and where they were located. After discussing and helping understand the layout of their savings, we discovered that the savings and property encompassing their estate totalled an approximate amount of £1.3 million.

Our adviser would inform the parents that this amount would certainly open them up to an inheritance tax liability upon second death of approximately £120,000! That came as a substantial shock to the elderly parents, who were totally unaware that such a problem would affect the wealth they wanted to pass on to their loved ones following their passing.

With such a potential problem passing onto their sons, they wanted to explore whatever avenues they could to reduce that liability whilst they still could.

Thankfully, our advisers are well-versed in effective methods to reduce inheritance tax for their specific circumstances. We presented an option for annual gifting allowances, and making much larger gifts, providing a full understanding on how they fall outside of their estate after seven full years – making them potentially exempt transfers.

As both of the parents were in their early 80s, they both felt that this option would be fruitful as a plan – and they also didn’t feel comfortable losing any control of their savings with the potential costs of long-term care on the horizon.

Thankfully, our advisers had another solution up their sleeves – something proven much more suitable for their circumstances. The elderly couple could invest in a product that qualified for Business Relief. This avenue proposed a more realistic goal where they only had to survive two years past the investment date for the money to fall outside their estate. Once those two years had passed, the money would no longer be subject to inheritance tax.

After explaining the entire process and outlook, the couple felt comfortable with the advice to invest £300,000 into a Business Relief qualifying product.

This investment opportunity was two years ago, and by following our adviser’s advice, the investment is no longer liable to inheritance tax. Our referred elderly parent clients have successfully saved their sons a hefty £120,000 inheritance tax bill. Not only that – the couple still retain full access to the investment should their needs change soon.

Through this trusted introduction, our advisers have provided great peace of mind for the entire family and helped to secure the family’s financial future.

Do you have elderly relatives unsure about their savings and investments who may need help from an inheritance tax situation? Contact our friendly advisers today for the help and advice required.