Apsire Partnership Brochure - page 27

Thedilemma
Peter and Anne are an affluent couple who have built up significant
invested assets as well as their family and holiday homes. They find
themselves in a situation where they need to mitigate against the
inheritance tax that is inevitably going to be due if they take no action.
Gifting is theobvious solutionbut they have always resisted.
Thesolution
We recognised that Peter and Anne’s main concern was a fear that, if
they released some investedcapital for an inheritancemitigation scheme,
they would not be able to afford the cost of their care. Through our use
of cashflowmodellingwe demonstrated a range of scenarios, assuming
amixture of poor economic conditions and high care costs. In particular,
we considered how long their money would last if one of them needed
to go into care in the worst-case scenario, i.e. from ‘tomorrow’, and the
other remained in the family home. In thiswaywewere able to reassure
them that theywould not run out ofmoney, and in fact it demonstrated a
significant excess over and above their requirements.
Thenittygritty
Theyagreed to invest£300,000 inadiscountedgift trust inAnne’sname,
whichmeanshalf themoney isnowoutsideof theestate, saving£60,000
tax if both of them were to die within the next 7 years and £120,000
if both die and Anne’s death is after 7 years. The mitigation plan pays
an income to them which could also be used to help pay care costs if
required in the future. We continue to revisit their cashflowmodels at our
regularmeetings.
Realpeople,
real life
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