Inheritance planning can be a daunting task, especially when considering the complexities of taxation and the need to preserve wealth for future generations.
While property, cash, and investments are commonly considered, precious metals like gold and silver offer unique advantages in inheritance planning that shouldn’t be overlooked.
The Role of Precious Metals in Inheritance Planning
Precious metals have long been recognised as a store of value, maintaining their worth through economic fluctuations and political changes. When it comes to inheritance planning, they offer a stable and tangible asset that can be easily passed on to heirs.
Unlike other assets, gold and silver are not subject to the same volatility as stocks or real estate, making them a reliable option for safeguarding wealth.
Read 'How Will My Grandchildren Benefit From My Gold Bullion Investment?'
Is Gold Exempt from Inheritance Tax?
The short answer is no—gold is not exempt from inheritance tax (IHT).
There is a common misconception that only property is subject to IHT, but in reality, almost every asset within an estate, including precious metals, can be liable. The current IHT rate is 40%, applied to the portion of the estate exceeding the £325,000 threshold. Given the rising value of estates and the potential for higher tax liabilities, it’s crucial to consider strategies that can help minimise this burden.
Read 'Is Gold Exempt From Inheritance Tax?'
Strategies for Reducing Inheritance Tax with Precious Metals
There are effective strategies for reducing inheritance tax with precious metals, particularly by focusing on gifting gold and silver to lower your taxable estate. Additionally, leveraging the Capital Gains Tax exemption on UK legal tender coins can further enhance these benefits.
By gifting precious metals within permissible limits and maintaining detailed records, you can significantly minimise inheritance tax liabilities while safeguarding wealth for future generations.
Gifting Precious Metals
One effective way to reduce your estate’s IHT liability is through gifting. Each individual can gift up to £3,000 annually, free of IHT, and this allowance can be carried forward one year if unused.
For couples, this means a combined gift of £6,000 per year. Additionally, you can make smaller gifts of up to £250 per person or larger gifts on special occasions like weddings. Importantly, if you survive for seven years after making a gift, it becomes completely exempt from IHT.
Capital Gains Tax (CGT) Considerations
While planning your inheritance, it’s vital to be aware of the impact of Capital Gains Tax. The tax-free allowance for CGT has been significantly reduced, which means that selling assets like property or shares could result in higher tax liabilities.
However, gold and silver coins classified as UK legal tender, such as Britannias and Sovereigns, are exempt from CGT. This exemption makes these coins particularly attractive for inheritance planning, as your heirs can benefit from the full value of the gift without facing additional taxes.
Read 'What Bullion Is Capital Gains Tax Exempt?'
Recording Gifts and Transfers
Proper documentation of any gifts or transfers is essential to ensure your heirs benefit from the available tax exemptions. This includes keeping records of what was given, to whom, when, and its value at the time. This meticulous record-keeping can help avoid any disputes or complications with HMRC.
The Appeal of Precious Metals for Inheritance Planning
Precious metals offer a unique combination of stability, privacy, and tax efficiency, making them an ideal choice for those looking to preserve and pass on wealth.
Gold, in particular, is often seen as the ultimate store of value, maintaining its purchasing power over centuries. By incorporating precious metals into your inheritance planning, you not only diversify your estate but also protect it against the uncertainties of the future.
Read 'Is Gold the Ultimate Store of Wealth?'
Here To Help
We recommend that all readers should do their own research before making any purchases, but if you’d like to speak to a member of the team for some additional guidance, we’d be delighted to hear from you at 01769 618 618, or you can email us at sales@bleyer.co.uk, and we’ll get back to you asap.
