Assets Accounting newsletter 13th November 2023 - Inheritance Tax Planning Tips
With inheritance tax receipts to HMRC set to reach new levels this financial year, now more than ever are families needing to plan for their future.
Inheritance tax could take a large proportion of your wealth – 40% of everything above £325,000 -and stop your family members enjoying the results of your hard work. Avoiding or reducing inheritance tax is possible if you have expert advice and plan accordingly. Below are three essentials to mitigate inheritance tax.
Talk to your family
The first step towards a successful inheritance plan for all families is communication. Talk to your spouse, children, and stepchildren. Understand their concerns, expectations, and spot the potential conflicts. Some items may have emotional as well as purely monetary significance to some family members. That ring that has been passed down on one side of the family for years or the old picture that was part of a first home. You need to find out what items are significant to each family member, and you may need to find some compromises. They can’t all have your watch or your diamond ring. If you have children who no longer have much contact with you, you may still need to discuss your plans with them, even if it takes a special effort. One solution may be to allot each beneficiary the most appropriate sentimental item and divide up wealth equally.
Take stock of your assets
The next step in your inheritance planning journey is creating an inventory of your financial assets: your home and any other property, investments, savings, and any valuable possessions. If you have a surviving partner, they might be your first priority, but you need to look at what happens when they are gone. Your home may be the biggest challenge. It can be difficult to balance its value against other assets and giving it to one beneficiary may lead to resentment. Stipulating that it should be sold, and the proceeds shared is one answer. A shared bequest that allows one beneficiary to buy out the shares of the others is an alternative. You also need to look at the liabilities or debts that eat into your estate. You want to leave financial security and happy memories, not debts. Knowing what you have now can be the basis for devising a fair inheritance plan that takes into consideration the needs of everyone who survives you. Look at your life insurance as part of this review. It can help ensure equal inheritance for all parties. The payout from a life insurance policy can be divided among the beneficiaries, helping to balance any disparities in the value of your other assets.
Write a will
A well-crafted will is the linchpin of any inheritance plan, and for all families, it is crucial. Work with an experienced solicitor to draft a will that clearly outlines your wishes and specify the exact percentage or value that each heir, whether biological or stepchild, will inherit. This ensures that your intentions are legally binding and minimises potential disputes later on. Review and update beneficiary designations on retirement plans, investment accounts, and insurance policies. Beneficiary designations override instructions in your will. Failing to update can lead to unintended consequences – money intended to go to a current partner still being earmarked for a previous spouse is not uncommon.
Seeking the guidance of a qualified financial adviser is vital for any family. Please talk to us about any tax related questions you may have. If you need financial advice, we can recommend a Financial Advisor to you.
Tools available to help SMEs tackle cyber security issues
The National Cyber Security Centre (NCSC) has several online tools for small organisations to help find and fix any cyber security issues.
The NCSC unveiled the services to coincide with the latest phase of its Cyber Aware campaign, which is aiming to raise awareness of cyber security among the UK's small businesses, micro-businesses, other organisations, and sole traders.
With official statistics showing that more than a third of small businesses suffered a cyber-attack last year, the NCSC urged them to make use of their Cyber Action Plan and Check Your Cyber Security tools.
The Cyber Action Plan can be completed online in under five minutes and results in tailored advice for businesses on how they can improve their cyber security.
Check your Cyber Security – which is accessible via the Action Plan – can be used by any small organisation including schools and charities and enables non-tech users to identify and fix cyber security issues within their businesses.
Small businesses are a common target for cyber criminals, with the government's last cyber breaches survey revealing that 38% of the UK's small businesses suffered a cyber incident over a 12-month period.
The range of attacks can vary widely, from business email compromise to denial of service and ransomware attacks.
See: Introduction - NCSC.GOV.UK
Expert regional innovation hubs given £75 million boost to local research, businesses, and economies across UK
Regional clusters of innovation across the UK are being backed by a share of £75 million that will enhance local economies and pioneer game-changing solutions from healthcare to net zero.
Following pilots in Liverpool and Teesside, launched earlier this year, a further 8 Launchpads, facilitated by Innovate UK, will be rolled out across every nation of the UK. These initiatives will build on existing clusters of high-tech innovation in each region, such as renewable energy in Southwest Wales, Agri-tech in East Anglia, and digital health in Yorkshire.
Launchpads is a programme that supports emerging clusters of small and medium-sized enterprises (SMEs) by providing each Launchpad up to £7.5 million from Innovate UK to fund innovation projects led by local businesses.
The £7.5 million bespoke funding from each Launchpad will allow SMEs in each region to bid for support that is tailored to the unique needs of each business cluster, helping them drive innovation, expand operations, and boost their local economies.
Fairness Innovation Challenge
UK registered organisations can apply for a share of up to £400,000 for projects resulting in new solutions to address bias and discrimination in AI systems. This funding is from the Centre for Data Ethics and Innovation (CDEI).
The competition closes on Wednesday 13 December 2023.
Innovate UK will work with the Centre for Data Ethics and Innovation (CDEI), part of the Department for Science Innovation and Technology (DSIT), to invest up to £400,000 in innovation projects.
The aim of this competition is to drive the development of novel solutions to address bias and discrimination in artificial intelligence (AI) systems.
The objectives are to:
- encourage the development of socio-technical approaches to fairness;
- test how strategies to address bias and discrimination in AI systems can comply with relevant regulation including the Equality Act 2010, the UK General Data Protection Regulation (GDPR) and the Data Protection Act 2018; and
- provide greater clarity about how different assurance techniques can be applied in practice.
Your proposal must address bias and discrimination in one of the following use cases:
- provided healthcare use case, or
- open use case.
Your proposed solution must adopt a socio-technical approach to fairness, seeking to address not only statistical, but also human and structural biases associated with the AI system in question.
In applying to this competition, you are entering into a competitive process.
Growing your business? – Just keep going!
The Bank of England (BOE) recently held interest rates at 5.25% and warned that the restrictive policy will remain for an extended period, despite the bleak economic outlook. BOE forecasts suggest the UK will not get to the 2% inflation target until the end of 2025. They expect inflation to fall to around 5% by the end of this year. Their forecasts also predict that output will remain stagnant in 2024. The Chancellor, Jeremy Hunt, remains more optimistic and was quoted as saying that the UK economy has remained far more resilient than many expected.
Clearly things are changing rapidly right now in this chaotic world, and it is difficult to maintain a sense of control, but the most successful people we meet “Just Keep going!”
Growing your business is all about enthusiasm and a mindset to power on with the goal of striving for success. Below are a few thoughts to help you think ahead and focus on your business growth.
A growth strategy starts with identifying and accessing opportunities within your market. The strategy addresses how your company is going to evolve to meet the challenges of today and in the future. A growth strategy gives your company purpose, and it answers questions about your long-term plans.
Having a growth strategy is important because it keeps your company working towards goals that go beyond what is happening in the market today. They keep both owners and employees focused and aligned, and they allow you to think long-term.
The first step is to look at five important areas that will help you develop a growth strategy:
- Think long term – invest time in understanding where the market is going and what this means for your customers. Short term decisions do not help grow a business.
- Having a good value proposition is essential – this states the relevance of your product or service, what it does, and why customers need it. What is yours?
- Expanding your reach – who is your target customer and what do you need to do to let them know you exist and that your product or service is relevant to them?
- Growth means new people, systems, and (maybe) different ways of doing things. Grow at a pace you can manage.
- How will your marketing get your value proposition to relevant customers?
Once you have taken some time to write out your growth strategy and where you want your business to be in (say) 2 years, the next step is to work out your marketing plan.
A marketing plan is a business document outlining your marketing strategy and tactics. It is often focused on a specific period of time (i.e., over the next 12 months) and covers a variety of marketing-related details, such as costs, goals, and action steps. But like your business plan, a marketing plan is not a static document. It should outline:
- How you are going to keep existing customers happy and returning to buy more often;
- What the goals are for getting new customers; and
- The marketing methods you are going to use to achieve 1 and 2.
Please talk to us about helping you formulate your expansion plans; we have considerable experience in helping our clients grow their businesses.
