How can you ensure wealth is safely and tax-efficiently gifted to those you want to help?

Some of us have accumulated wealth, unparalleled to the generations before us, and so a larger proportion of the population are questioning how to pass on their hard-earned wealth to relatives and loved ones.

Here are some examples of how you can forward your wealth to those who you want to support financially. Although, it must be emphasised that not all are suitable, as everyone will have a different financial position with varying tax positions and objectives. Talking to a financial adviser  from the outset will enable you to understand and explore a variety of options that are specific to your long-term needs.

Options for making sure your wealth can be securely gifted to those who you wish to benefit from it:

• Regular gifting out of surplus income if it doesn't affect your standard of living is immediately exempt from Inheritance Tax and can be paid to an individual or trust (e.g. to grandchildren who may be minors)
• Make use of annual exemptions and if you haven't done so already, use the prior year’s £3,000 allowance as a means of reducing the value of a Potentially Exempt Transfer (PET). In this instance, for a couple this could amount to £12,000 being exempt
• Contributing to Junior ISAs should you want your children to have a pool of capital they can access from the age of 18
• Investing in Designated Unit Trusts – one earmarked for each beneficiary – allows for a future Stock Transfer as a means of gifting when you believe the time is right
• Investment Bonds held in trust with a certain number of clusters assigned to your chosen beneficiaries. There are a number of tax-efficient trust structures such as a Gift Plan, Loan Plan or Later Life Gift Trust
• Making sure pension death benefits are considered as there are different tax implications based on the type of pension and the age of the individual looking to leave a legacy
• Considering a life policy to be held in trust so that any Inheritance Tax can be paid by the policy, allowing for the individual’s beneficiaries to have secure access to the inherited estate and or any residual death benefits

The value of an investment with St. James's Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.