IHT and Gift Planning

Kathryn Knowles  00:04

So good morning, everybody, we’re just sort of letting everybody get in and sign up and sort of just get settled for the day. If everybody can remain on mute, please, just for now, and we are recording. So this will be recorded put out on public for people to see. So if you don’t want to be seen keeping videos off, if you don’t really want to be involved in the conversation publicly in a sense, then then, you know, obviously, we can always chat afterwards. But But yeah, if you can all just remain on mute. For now. That’d be absolutely great. And hopefully everybody can see and hear was okay. Right? Should we give just just give it a minute or so make sure that we’ve given people a chance to log in and I’ll keep an eye on it and keep letting people in as well? Do you want to start leave or start going into it all?

Lee Robertson  01:10

Yep, perfect. So welcome, everybody to the second in the series. Today, as you know, it’s about IHT gifts and all things around that. You’re not really here to listen to me at all. You’re here to to Kathryn. So welcome. Thanks for attending. As ever, feel free to ask questions in the chat or later if we have a bit of an open chat if we have time for an open chat. But thanks for coming along. And just a reminder, if everybody could be on mute, while whilst we get started. So over to Kathryn.

Kathryn Knowles  01:44

Thank you, Lee. So thank you everybody, for coming. And we are gonna be talking about protection insurance, and the IHT and gift planning side of things. I think it’s really important from the staff, me to always be very clear that I’m a protection insurance advisor. So I’m not here to discuss IHT and gift calculations or anything like that I could do very, very basic aspects of it, in terms of how I’m speaking to somebody, but I will always speak to an IFA, if we do have someone in that kind of a situation just to make sure that there’s no kind of magic in the background. So no, sometimes IoT, you know, and things like that. Advisors can sometimes do do things that weird and wonderful that as mere protection, insurance advisors would have no concept as to what you’re doing. So I’m just purely here on the insurance side. And so when we are talking about things like the IHT and gift planning, so lots of people be aware that there is 40% tax at the moment. So I’m gonna talk about this, this is obviously beginning of 2024, we’re chatting. So at the current time, it’s about 40% tax that can be there for people for their families, if they are to dine. And I’m certain timeframes and things like that. But if you look at the IHT side of things, first, just can hear a little bit of noise there. And I think I know who that was, you’re someone who works with me, and it’s got a little one at home, that’s not very well, anyway. So we’re going to be looking at the HT first, then we’ll move on to gift and then I’m going to slightly go into business property relief insurance, I’m not going to do that too, in depth, it is quite technical. And there’s only so much that I can chat through in 45 minutes. I’m a fast talker, but but there’s still limits to what I can do at times. So when we’re looking at people, generally, if we’re looking at from a very basic point of view, everybody has a certain amount of assets that they’re allowed to give someone that they can inherit without being taxed. And that is usually the nil rate band that we’re referring to. And for a single person that has 325,000 pounds, and anything above that can potentially be subject to inheritance tax, we then also have the fact that they can sometimes have a bit extra in terms of what’s known as their residence band that can be added on to it as well, which is up to 175,000 pounds on their main residence. So a single person can potentially have about 500,000 pounds of assets that someone can inherit off them without there being any kind of inheritance tax there.

Now, if you have a married couple, and there’s no inheritance tax between married couples, so if we don’t, in a sense use that inheritance in a sense of one person does die, that future and 25,000 that 500,000 can just be absorbed and added on to the surviving partners, which can mean you know, potentially that we’ll have a million pounds worth of assets between a married couple before and IHT might be coming into play. So, so and it’s drinkable, so basic. This has been a joint Cobra 650,000 We might have that extra there in terms of the main residence as well. It can be a bit tricky depending upon how the residence has been owned, whether or not there’s been any kind of use of IHT in the background. So what Wouldn’t says if you are a protection insurance advisor, it is always a good idea to sort of like chat to people and say if you think someone’s near this level, or if they are definitely in this level, make sure that they do have a financial adviser. And that they can at least reach out to somebody that you suggest that you trust, who can have a look at it, make sure that everything’s due means in the best way possible. Because sometimes with these things, there are stuff that financial advisors that can do that will obviously lessen it quite a bit.

So when we’re looking at protection insurance, for an inheritance tax, what we’re really wanting to do for a married couple will be what’s known as joint life second death. And that basically means that the insurance is going to cover both people. And what will happen is that they will, so it’s just thrown with them, they just suddenly left, it’s just suddenly confused me, I think he’s done it so that I’m the main features. So that’s fine, just a slight change revision a little bit with it. Hopefully, he’s not lost to signal a connection. So we’ll be doing joint outside. So it shows both people, if someone dies, the policy still continues. And then it’ll pay out on that second person’s death, when the actual IHT will be due, because IHT itself is different to gift planning, but the IHT itself, a married couple will be due on the second death. So it’s actually cheaper as well. So start my first death, if we’re looking at it. In a sense, the risk for the insurer with a gamble is basically that in a sense, one of them dies. But with joint life second death, the risk of the gamble is that both of them die. And it’s actually really, really low risk, that you would die as a young age in a sense, or that you that you die before what we would be expecting. And it sounds it obviously it can happen. It does happen a lot, but the risk is quite low. And there are times as well, where it’s I’ve been helping some people recently where there is somebody who was a couple, and they one of them maybe because of risk.

So often we’re thinking health risks. Sometimes though, with people who are high net worth, I have to say, you do come across quite a few who do tend to go skiing quite a bit who maybe like to go sailing and things like that. And depending on what they’re doing that can quickly lead into, you know, potentially quite large risk ratings. And when we’re talking, especially if it’s about sports is what’s known as a per mil rating. Now, I’m sure quite a lot of people will be familiar with that. But just in case, when we see increases on premiums with insurance is a lot of the time it’s a percentage increase. So we’re probably all familiar with plus 100, which basically means insurers going to double the premium because they think there’s a, there’s double the risk of this person making a claim roughly, I’m probably making that fat, I’m sure some underwriters have told me after saying it’s such a basic term, with per mil ratings, it’s very different per mil is an extra payments that the person has to pay for every 1000 pounds of cover that’s taken out. So when we’re talking a lot of the time about IHT liability, we’re usually talking about people who are quite high net worth, and where the IHT liability is quite significant. So for each of those 1000 pounds, it gets quite a lot. So we just need to be really, really mindful of that. However there is especially with doing joint life, second death, there’s a little bit of a technicality with it. And it’s not really tech algebra, it’s a little bit of a an interesting thing with it, when it comes to risks, because obviously, they they’re gambling on to people dying. Forgive me for being blunt about it, it’s just sometimes it’s easy to explain what we’re trying to do. So if one of those people has quite a risk, maybe it’s a sport risk, maybe it’s a health risk, it’s in you might be thinking, well, they’re going to be declined, you know, based upon my experience, that’s not necessarily the case, because the share, obviously the gambling on two people dying. So this person here has a lot of risks. So they kind of class them as well, they’ll just be the first one that goes, so the other person is still there, so the person can still be really insured. And what’s quite interesting about that is that you could do a joint life second death, the show might go quite well in showing this person here. But ultimately, you know, we were sort of like saying that we couldn’t insure them, but because we kind of expect them to go first, then that can be included in it. But the second person that he was going to be absolutely fine live until you know 90s loads on there might be something happen, which means that they actually do die quite early.

So the one that they think is riskier is still has the insurance sensor is a really good way, actually of insuring people that might not be able to be insured otherwise. And if you do find though, that somebody is going very tanky so forgive me if I’m sort of jumping around the place a little bit. If you do find you’ve got two people and one of them has really got high risk and this person So is would really be a decline, then what would happen is, is that they were doing sure we would insure both people but they twice for a single life. So just be conscious of that when you are doing your premium calculations, because again, if we’re talking IHT, usually not the cheapest of premiums. And we want to be mindful of that. So joint life second death is actually cheaper than joint life, second death, but one person has been declined in the morning pricing for one person is quite complicated, but then the walls kind of thing. And we’re just wants to be very, very mindful of that when we’re chatting about him. Ideally, inheritance tax, we’re going to be doing joint life, second death haul of life insurance. There’s different types that we can do. I’m sure everybody has their own view as to what’s best and things like that.

I speak to quite a lot of people who come to me and through IFA connections, you want me to support them. And they’ve set up all of life insurance donkeys ago, 2030 years ago, and they’ve got that rate review. And because it was whole of life reviewable insurance, which I have to say, looks incredibly lovely, really, really lovely. From the start. It’s, you know, I’ve can give some examples, some pricing I’ve done recently for somebody. So the reviewable option will look brilliant. And the person is going to want that. The problem is, is that when you start to get towards the age of 60s, or 70s, and these reviewable one starts with you, generally, on a five yearly basis, the premium starts significantly go up, we’re not talking small amounts, we’re talking easily doubling, you know, they’ve been paying 250 pounds, they’re now being told, is going to be 600 pounds. And they’re now saying, Whoa, that’s ridiculous, that’s such an increased, I don’t want to do this anymore, I want something where it’s never going to change. And the problem is, is that a lot of the time at that point, it might be a case of what you available to him 600 pounds. But to lock it in place, now we need to you need to pay 1100 pounds to get a guaranteed premium, which obviously, in many ways he wants to go for that. But then, in the long term thing of eating well, actually, that is a huge jump of 600 versus like 1100 pounds. But this 600 pounds, probably going to at least become 1200 pounds in five years time. And then five years time from that we’re going to be probably over 2000. You know, it’s, it’s I mean, I’m, I am obviously making numbers up here. But this is very significant increases to the point that people will just start cancelling the policy, they just literally cannot afford them anymore. So when you are looking at these options, it is a good idea to give people the guaranteed and the reviewable option, but it’s important to really discuss it with them. And people, you’ve got to give them the choice and let them choose what they feel is right for them.

I have somebody I’ve been supporting recently, we needed to do some sort of life insurance, we’re doing 200,000 pounds of life insurance. And that was going to be you know, assuming that they’d have a good old time, you know, it’s going to be there for another 40 years or so. Now to lock it in place. Now, the premiums never change of, you know, say good 3040 years, assuming that they obviously do live as long as we would expect them to. And the premium for that was about 200 pounds a month. The reviewable premium was 16 pounds per month. Huge difference. And obviously, we went through that discussion, when you look at the reviewable ones, they will say in the illustrations, this is what we expect it to be in 10 years time 15 and 20 years time. The problem is, is that obviously you can’t see the projection beyond 20 years time. And also those projections are simply projections, there’s no guarantee that they’re going to reduce increase at that rate, it might be more favourable, but it could also be much more expensive when we get there. So let’s be really, really conscious of that. So again, ideally, joint life second death life insurance, obviously, if someone is single, then we’ll be just doing single life haul of life insurance, that’s absolutely fine, too. And, but we can find as well that some people literally cannot afford the whole of life insurance premium, even if they’ve got all this net worth. And sometimes you can find people obviously, who are on high net worth, you know that there are people as well just going I’m not paying for that kind of thing at times as well just you know, sometimes I think people assume that because sometimes at work, they will just kind of throw money at these things they won’t. And they need to obviously see the value of them, just as the rest of us would do. You know, they don’t always have lots and lots of cash spare to be able to spend on these things. And so what can be an option. Now this is one where you have to be careful with your recommendation in terms of what you’re writing, in your report to your clients and what you’re suggesting to them as you would always give them the price for all of life.

But you could also potentially look at joint life second death insurance to age 90. So a term insurance policy, not ideal. And I think we all need to refinance that it’s not ideal to go to age 90. We want it to be call of life if there’s an inheritance tax liability. there. But if it’s a choice between somebody walking away with no insurance, because the whole of life is too expensive, or going to age 90, which covers a significant risk time period of where they potentially will die, it’s worth giving them that price and giving them that option to be able to decide if that feels right for them to age 90 will be significantly cheaper than whole of life because the insurer was gambling, that they will live past age 90. Whereas with whole of life, there’s no gamble, assuming that that person is truthful in the application, assuming that they pay keep up to date with the premiums, then that policy is paying out. So that’s why it’s so much more risky, and so much more insurance costly for the insurer. What we really want to do as well is have a look at what’s going to be happening with the beneficiaries and things like that. So there is some consideration to potentially saying to people, right, okay, well, it is, obviously this is the price. This is to help, usually children. So can the children help pay towards that price? That might not be able to? Some parents quite like the idea, some don’t like it at all, but it is a potential conversation that you can have, you know, sorry, going, Oh, well, if it was half the price, I’d be able to do it yourself, well, if you can do half is there any trust that your kids can make up the other half because ultimately, yes, this premium may not be what you want it to be. But that liability isn’t going anywhere, unless the government does something really wonderful with taxation. And I’d say wonderful, I’ve seen it be wonderful for some not wonderful for quite a lot of other people. But again, that’s way outside of my expertise. So it’s just something that you might want to be thinking about in terms of the trusts, so really important with the trusts on these policies.

Now, this can be debatable, but I can say what I will be doing in terms of my compliance, and just to go back just a second, as I said. So in terms, if if I did term to term 90 For someone for IHT liabilities, then full of life, it would be very specific, I would have had phone conversations with the person that would have been recorded to prove that I’ve had this conversation, my demands and needs report would also be saying, I have recommended that you have this whole of life insurance, and the cost was indicated to be this, you have however chosen to go with this option to age 90, because it feels much more affordable to you. And that is all about obviously we’re protecting the client, because we are giving them the assurance we’re doing everything we can. But we need to protect ourselves as advisors as well protect ourselves from future complaint risks, any kind of uncertainty that we’ve not been clear with the client. So you know, always go with like, this is what I recommended. But this is what’s ended up going ahead. And when you are saying this is what I recommended, I do suggest including the premium in there as well, because again, it just removes you’ve already got it down in front of you. And it just removes any kind of doubt in the future of somebody who’s going to come back, maybe try and make a complaint then when they when you say to them, but I put this in this documents, it said this, it said the price and you decided against it, then it becomes less and less likely that they’re going to have that ability to potentially complain or say that there’s been any kind of misadvice there because you’ve laid it out very, very clearly for them. Right? Going on to the trust side of things now. So when we get a trust, I did some wonderful planning for somebody with gifts. I’ll explain that on the bit when we’re going into the gift side of things. And it was an absolute nightmare. The trust, I’m sure you’re all very familiar with trusts and how horrible they are. I am just talking about the trusts that are associated with life insurance here, I’m not talking about the financial trust that ifas would be doing or could be doing, because I don’t know anything about. So in terms of that we’re going to be looking at a the terminal illness benefits. terminal illness comes with life insurance basically says if you are ill and are diagnosed with less than 12 months left to live, we’ll potentially pay out the claim early to you, you know as a to help you financially during those last 12 months.

Now, what we want to do is make sure that that terminal illness benefit is gifted to the trust because if not, if they do go ahead with trying to claim on that terminal illness, which they might want to they might not understand exactly what they’re doing. They might just hear that they’ve been told they’re terminally ill, they might just think, oh, this insurance says that and go for it. Then we’ve completely defeated the whole point of what we’re doing. We have basically then the money from the payout is going to go into their estate and then the the inheritance tax is going to be even bigger than what we originally thought it was going to be. And that is a simple tick box that advisors we need to do. So it’s something that you really, really should be on top of making sure that you’re going to get in that is going to be gifted into the trust. It’s not all always the case that we want to gift into the trust and for a lot of people that isn’t necessarily needed. But if you are speaking to people and it is an IHT plan, then we will be gifting into the trust with that. Do also watch out for automatic beneficiaries. Now when we’re looking at trusts, ideally, we want to use something which is known as a what’s it called a nod but not a nomination, but I’m just getting myself confused. Now discretionary trust, there we go. We do choose to discretionary Trust, which basically allows the trustees to pay the money to who they feel is the best person. So usually when it’s IHT, say we’re going to have children, that probably the trustees and their own beneficiaries. So it’s very, very simple, nicely done. But there are some insurers that when you do the trust’s, it can be really, really tricky, because obviously, it’s when we look at these discussions, we also need to be able to hopefully change it because you know, maybe, maybe the child has died. And we want to kind of like move it around a little bit. And with some of them, though, it will say, automatically, this will pay out to your spouse. Now with inheritance tax, we don’t want it to ask magically payouts and spouse, so there’s so many shows, you might need to choose a slightly different tax and I did was when I got to the gifting, I had to use an absolute trust with one in show, which is something that I would always want to avoid because it can’t be changed. But without using it, it meant that it had to go to the spouse. And we have to avoid that because that just was not at all what we were wanting to happen to this. So keep an eye when you’re doing the trust, what’s happening to that terminal has benefits, it is being gifted. And in terms of the beneficiaries, let’s just make sure that there’s nothing that will say this, a spouse can potentially get it obviously, if it’s terminal, if it’s don’t have second death, that’s not necessarily an issue, but just really keep an eye on those beneficiary side of things. Okay. So when we are then I was gonna say as well in terms of the IHT side of things. But I’m not going to go into this too much again, because we’ve only got certain amount of time. But we do have something known as the Rysaffe principle. Now and you will learn from Zurich, some of you might or might not know him, Andy Woollon, he does really training on gifting and IHT planning, and a lot of these technicalities. If you do a search for him on Google, you’ll find you know, lots of information and examples which are really, really good. But essentially, for a lot of people who are taking our term assurance, which is just a protection insurance policies, it’s unlikely that the rice happens for would come into play. But if you do have somebody who’s paying quite significant premiums on a policy, and you know, it is potentially in the IHT level, so you know, we are talking you know, a really good amount of premium, you might need to be just really on top of that really conscious of it, it could be that what you end up doing is instead of doing one policy to cover the full IHT liability, you might be doing different, like smaller amounts, each of them having their own trust and you would set them up on different days as well, just so that there isn’t, you know, a potential taxation on the payout. So do read up on the Rysaffe principle as well.

So it gifts loss of you’re probably know about gifts and things like that. So a gift happens if somebody gifts money to someone and they die within seven years of that happening. Now the problem that we have with this is that this isn’t even necessarily in the high net worth space. This can also just be parents giving deposits to children’s help them to was buying a home with 30,000 pounds. Yeah, here you go, you know, help you set up on our property ladder and things like that, that is a gift because anything above 3000 pounds is a seen as a gift. If it’s done in a year, there’s sometimes an allowance for 6000 if we’ve not done a gift the previous year. But again, it’s a little bit tricky. But we just need to be you know, if you’re an advisor, and you hear that someone’s received some monies over 3000 pounds, you might just need to do a little bit more digging, just make them aware of at least that there could be some gift taxation there. And it helpfully, we’ve lost a lot of the specific gift insurance policies that are available in the industry. So we’ll just chat about the minutes a bit. It’s really important as well. So with inheritance tax, if it’s a single person, obviously the inheritance can come from one person, if it’s a married couple, it could be coming from two people with a gift a lot of people say to me and my parents gave me a gift, that’s fine. But when it comes to a gift, a gift does actually come from one person. So we’re doing a policy that is a person that we are ensuring we wouldn’t be doing joint we’ll be doing a single life policy because we need to pay out when that person dies. So it’d be the first person death.

So gifts, insurance will be the tax side will be over seven years. And we used to have a wonderfully terms and policy called Gift Inter Vivos, which was a really specific life insurance policy. That would taper over time because with the gift taxation it does reduce over time. She’s quite nice. And but we don’t really have them anymore, there’s only LV that still have a gift into vivos policy, which can be brilliant, in the sense of it has specific rules in there as well potentially offers some additional protections if the if the government decides to change, like give percentages and things like that. But ultimately, the problem can be is that if LV aren’t able to insure because of risk, you know, health risk, or maybe their rating is significantly, it’s going really, really pricey, we might decide, well, actually, instead of using a gifts inter vivos policy, you might just do a little bit of fancy work as an advisor. So what you would do is, you’d figure out what the gift is, and would choose 40 percents of that, we’re just gonna get 5% of it, we’re then going to divide that by five, so we’re going to have 520 percents of the overall 40%. Okay, and we’re going to ensure one of those 20 percents for seven years. And then we’re going to show them for six years for five years, or four years for three years. So it’s going to taper over time, it is fafi, from an advisor point of view, shouldn’t be something that really the client should be too bothered about should be able to hide something like a lot of it from them in a sense of a lot of the procedural things, not hiding the advice or anything like that. But just like the faffiness that we’re going to be doing. And we’re going to get that obviously in front of them so that they can make a decision as to what they want to go with. Say, ideally, we would be doing the proper gift into vivos.

But there’s other ways that we can do it, we can do those five individual policies with some insurance, you can get multiple discounts, which are nice, granted, it’s going to mean in a sense, pounds worth of difference, considering what would usually be quite a high premium, depending upon the gifting that’s taking place. But just be really, really mindful of it. And as well, when we’re talking about things like consumer duty, and all these kinds of things, even if it’s not your thing to be talking about IoT to be talking about gifting, if you hear about something you sort of thinking Hang on a minute that’s there, or if they said that, you know, you should really be checking on it. And if need be suggesting that they again, bring in an IFA are bringing a protection insurance advisor, if you don’t do that insurance side of things, just so that we can make sure that at least that conversations happened, and everything’s done, everyone’s done everything possible support person. So with the gift trust, so this is what we would definitely say. So this is the one that we need to really be careful about the spouses and automatic beneficiaries and things like that we do not want the spouse to be getting this at all, because you know, it’s just going to the person who has then received the gift, which is say, usually, a child will then need to probably keep the claim from the parents who’s just received the money to pay off the taxation, which then in itself is going to create another gift. So we just need to be really, really on top of it. And again, we have to be gifting that terminal illness benefit because we need the money to be going to who we want it to be going towards. So the kind of like the last thing that we’re going to be broaching on ever so slightly.

I do appreciate we’ve got probably about 15 minutes left once I finished watching about this, but it depends on how much I wait for about this. If you have any questions, any thoughts, no Lee might be coming in and chatting about his knowledge and his experience as well as doing this when he was doing a lot of advice in this area. But the last one for us to chat about is potentially business property relief. Now there are certain allowances that the government allows people. So with business property relief, it’s all about. And it really came from family businesses, because what the government we’re finding is in terms of inheritance, tax planning, and things like that. And the inheritance taxations is that ages ago, there was families who had family businesses, they would then inherit the business, but then it’d be taxed on the value of the business, which often meant that they were having to close the business, sell it or anything like that to try and make the tax. And then that was actually having a big knock on effect in terms of that family in terms of the community. And so it’s being employed, just generally getting money into the economy and things like that. So what the government allowed was sort of a certain kind of relief to be done, if somebody is to buy in a sense of acquired shares in a company. Now this is talking about companies that aren’t on the stock exchange. There are a few other types as well. But generally, your big, big companies, don’t worry about it in a sense, but we are talking again, lots of family businesses, small SMEs, potentially we’ve got quite a few IFAs here, you might be selling a practice, you might have ball to practice, things like that. And what we’re doing is with the business property relief, if somebody has bought shares in a company, there can be a tax on those shares.

Now it’s different because we’re going to bring in usually we think, I always think of like taxation, you know, in a sense, IHT, it’s, there’s no no timeframe, gifts, seven years with business property relief, it’s two years. So we don’t need to do a massively huge policy at all. I’ve done a podcast on this recently and I did some examples of pride See in there. So please do listen, it can be incredibly low the amount of money that it is. But essentially what you do is you insure against the person who’s bought the shares. If they die in the first two years, then it can be taxed. So what we’re just going to do is so right, well, if that they do die, we’re going to insure against its own insure against the tax liability for the next few years. Done and dusted. It’s something that’s quite easily done. And there are quite a lot of caveats in terms of which businesses can get the relief, which ones can’t, what kind of how much relief they can get, and things like that. So it is something it’s not something we all come across on a day to day basis. So do obviously have a look online about it on the insurer websitesn podcast as well. The other thing I was saying I mentioned, obviously, Andy Woollon from Zurich before, there’s lots of insurers, Royal London League and Legal & General, if you put in the insurer name and the product type, you’ll find that there’s usually really, really good details on their websites about what they mean. And the other thing as well, because again, a lot of this is through taxation. And if you get in touch with your account manager at the insurers, they are brilliant at getting, like access to the tax people. And you’ll find that tax people are actually because they don’t often get chance to speak to advisors, too often really, really happy and eager to have a chat in sight. But also what are you wanting to know, and then they’ll just tell you everything, they’ll sometimes do come and do presentations for you and your team to be able to explain it also, if it is an area that you start to experience a bit more, it can be worth reaching out to the insurers and really tapping into that knowledge. Because that, you know, we can all know everything about everything. And you know, it’s it’s quite a, I think, an important thing as an advisor to sort of say, at times, you know what, I’m really, really good at doing all this. But you know, the actual taxation laws surrounding this kind of tax, and the way that I will be doing insurance for it, and not at the top of my mind, you know, in a sense of what my key knowledge is. So it’s always worth just reaching out. And having that kind of thing.

And this in terms of business property relief, it might not be something you’ve come across. But sometimes because we’ve not necessarily asked the right questions, you’ve got to think about 80% of businesses in the UK are SMEs. And there’s a lot of people who are inheriting or buying into our exchange in businesses. So there’s only 20% really the businesses in UK that probably wouldn’t be in line for having this business property relief side of things on it. So it’s something that we can identify, it gives an extra bit of support to that clients, they might not even know that that taxation is going to be there potentially. So it’s something that we can do. And it really sort of like puts us in good stead of clients if we are identifying those kinds of things. So that’s me having spoken through quite a lot there. Thank you, everybody for listening to that. And bearing with me. Lee, any thoughts? Any questions? Anybody else have any questions, please do feel free to put them into the chat.

Lee Robertson  32:54

Yeah, thanks, Catherine. Breaking the crack through a lot there. That’s fantastic. So a couple things from me. One, I would I would definitely commend the practical protection podcasts. It’s such a great resource and series. And we’re very, we’re very happy in October to be supporting that. So do check that out if you haven’t already. And I’m sure many of you have a quick question, Kathryn as sort of, I don’t know, as CO hosts privilege, I guess. You’ve talked about gifting to the boss and or being one one real provider left? Is this because we’ve seen We’ve seen the demise of so many insurance companies and so many have merged or have turned themselves into investment platforms or whatever they happen to have done. Are you finding that there’s less and less opportunity to ensure or is that is it? Are we just are they being replaced by newer providers?

Kathryn Knowles  33:42

It’s it’s a bit of a strange one, really. So not every insurance is joint life second death term show and so not all of them will do that to age 91. So obviously, if you don’t have that on your panel, then you’d maybe need to reach out or should really reach out to someone who can the gift into B vos we had LV and Aragon and obviously a Goldman’s. So now we are just down to LV, which is a shame. But I think with insurers, I wonder if it’s more to do with where the commerciality of things are, to be honest. So we’re finding as I’m sure a lot of advisors here are seeing, you know, endless amounts of options for critical illness cover and income protection, which is brilliant, because they are so adaptable to so many clients situations. And we really do want to see that but it does seem like well, if with not having many people doing the gift into V vos side of things, it just you know, the there’s not that I mentioned, there’s not that kind of draw to be doing that because of the fact that’s, you know, some people are just quite happy to absorb the gifts and just assume that it’s going to be okay. I think with a lot of people, they do rely on advisors to be speaking to people to be saying, this needs to be done. You need to get into the boss policy rather than it being people going to the insurance saying, Oh, I think I need to show my gifts. So it’s this kind of I think So be on the advisory community to be chatting about it more. I do speak to quite a few I phase where I’m saying to them, I will you know, when they say, Well, what’s it? What can you do to help our clients now, so did it and then I’ll say, I can do get into V vos type policies, and they’ll go, Oh, I didn’t realise, you know, and there’s Delton seems to be quite a bit surprised that they’re still available, or that there are ways of doing it. So it’s making sure that advisors know that it is there. It should be a discussion that is happening. And then but also, unfortunately, with the insurers, you know, until we start getting that push back to the insurers and that appetite to them, if we’re wanting this, they’re probably not going to spend time and dedicate resources to building the product in their systems. Yeah.

Lee Robertson  35:39

Great. Thank you. So Tracy has raised her hand. Thanks, Tracy. Feel free to come on screen or put it in the chat however you’d like to do it. Hands up but no response. Perhaps.

Kathryn Knowles  35:59

Maybe she’s maybe it’s a phantom hands. Maybe we didn’t mean to do the hand. Phantom hand.

Lee Robertson  36:03

Okay. Not to worry. A phantom hand. Any other questions? I mean, the other thing I guess I should have probably been a little bit unclear. I’ve not getting advice for five years now. So I’m rather behind the curve. And it’s many many years since I did my G 10. But I guess something we should talk about briefly. Catherine, you touched on it is as we wander towards the close is signposting. You know that that specialist stuff that you do. Yeah,

Kathryn Knowles  36:29

yeah, absolutely. So I mean, there’s there’s a lot of firms that you can signpost to saucey and protection, insurance, a lot of ifas come to me to do the protection side of things for a number of reasons. One, either, you know what, to be honest, the majority of times the case of that they just don’t want to do it. They’re much more happy doing investments and pensions, can’t be bothered protection, and very happy for me to step in and do it. It can be because there’s a risk there. And they’re just not sure what to do in terms of a health condition. It might be that they, you know that they’re part of a network and they have a limited panel, so they can’t access some of the things that we can do. So you obviously do have the signposting and that kind of an area where you can come to people like me, if you are part of a network, we do support quite a lot of networks in the UK. So maybe ask your network as someone that works do have other firms that they suggest. So check who your network says that you should be speaking with, provide the support. And you also do have, depending on what you want to do, you do have bebas find a broker service where you can go on so if you do search on Google for Bieber, find a broker. Lots of specialists on there, all the firms on there have been vetted. I do sit on the side of the Oversight Committee. So if you do contact anyone on there, and they and they seem like they don’t have the specialism that they say that they’re having to update me and let me know so that I can feed back to people on that. But I think communicating with signposting is and I think a lot of ifs, get this majority of iPhones, I think do is the fact that it isn’t a weakness, it’s not saying I’m not good enough, just like if you have a solicitor they will say buy me solicitor I’ll do the last of but you need an accountant to do the maths. That’s exactly the same with this kind of thing. There’s, you know, you can’t, I find it very, I think it’d be very, very difficult. And I think an incredibly skilled person who could do everything pensions, investments, mortgages, private medical insurance, protection to the top level in all areas, because there is just so much to do. I would absolutely I would love to be a full financial advisor, I’d love to do investments and pensions, I literally don’t have time, I you know, I’m doing protection insurance through and through, it is so technical. There are so many ways it can go wrong, especially with trusts and things like that. So you know, we just really, really want to sort of like make sure that people know like, just reach out to each other set up a nice network. You might say to someone look, I’ll bring you the gifts, you know, the people for gifts and HT you bring me people to do mortgages, you know, it’s can we make that work between us, we really, really positive. Quite a lot of people make quite a lot success, you know, with estate agents and the local over solicitors accountants is referrals coming in. It’s no different to speak into protection specialist. If you find that you’re in an area that you can’t do. I had somebody browsers providing support significant IHT liability in the UK, but they lived in Europe, and they were European citizens. Obviously, we needed to go to international routes that you might not have international insurances. If you do want to stop like have a look at international insurance, what’s really important is that you do double check with your PII insurer that you are allowed to do those obviously you need to get agencies but there are also some UK insurers now that are changing their structure a bit soft becoming what’s known as non admitted policies, which again, just double check if there’s been any changes in any of the insurers just because again, you would need specific PII and show permission to be able to offer those and you know, you don’t end up in any harm. Hot water by not realising there’s been a change.

Lee Robertson  40:02

Great, thank you. So from Katie Davis, she says thank you. But her question is do you always suggest seeking advice from a qualified accountant or tax advisor to verify the liability on estates to strengthen your file and advice? She has a few clients who have come to her with self calculated liabilities and usually drafted and other professional to help quantify this, is that something you would support? Yeah, I usually

Kathryn Knowles  40:29

suggest that they should have an IFA to make sure because again, it might be that the you know, we look at it from a protection advisor point of view and think, right, the need for 100,000 pounds with a pole of life. But an IFA might come in and actually got you know what you don’t, because when I’ve done this calculation over here, and actually with this allowance, and it gets really complicated, we have had Adobe Fox, obviously, we’ve all had it with consistent clients. And you know, certainly had it where we had an insistent client who was very much a case of like, No, I’ve calculated it, and it needs to be this, and I want this and stuff like that. And then you have that kind of thing of like, well, do I support this person, all and know that I’m doing it right, and what they’re going to get his rights, or do I leave them because, you know, they’ve been so insistent, they’re just gonna go somewhere else, and someone might do it wrong. And then I’m gonna feel, you know, potential response. But anyway, so I think as long as like with that situation, we were very clear to the person and said, You should speak to a financial advisor, this is a financial adviser that we trust that we would like you to speak to, if you are choosing not to speak to them, we can’t force you to speak to a financial advisor, we can’t force you to pay that fee. But we are going to write in our report to you and have it documented everywhere that we have told you that you need to speak to a financial advisor. And based upon what you’ve told us, this would be you know, in a sense, the liability that you will be facing. However, we’re not a financial advisors, we cannot confirm that we have met the full IHT liability. So it’s just making sure that you protect yourself because you know, ultimately, you know, we can’t force people to do things that don’t want to do. But at the same point, you then have to make a decision for you and your compliance as well as to whether or not there are times that you will just walk away there’s times that we’ve walked away from them and said, you know, even though business wise commercial decision, really bad commercial decision to walk away from someone in that certain situations. But you can just think you know what, I’m really not okay about this, we also had something once where you do need to be careful about safeguarding quite specifically in vulnerability, we had one once where there was a family. And due to the due to the family and their background, their culture, it would have been a male child that would have received all the the estates. So they wanted to put insurance in place so that the female children could receive some funds as well, which was obviously really lovely thing six, obviously, based on their culture, that’s the way it would work. But then you also seem to stand your ground. So at that point in the trust, it was all they wanted the trust to be all set up for the male child, because again, they would be the one who would set up the finances. So for, for us, in our point of view, in that situation, from a safeguarding point of view, we insisted that actually, the females were also included in the trust as trustees as well, because we just felt there are certain times when some things will come up, or you’re just think you know what, actually, we’re going to be doing this and respect people’s decisions and things like that. But we feel that this needs to be done in this way, just to make sure that everything’s going how we want it to go. I hope that’s,

Lee Robertson  43:36

that’s really helpful. Thank you. So I’m just doing a final check, because we’re coming towards the close. Sing a final check for any final questions, no hands up or anything. So I think we’re going to we’re going to be crashing out just on time, Catherine. So final call for questions. If not, sorry, Catherine, you

Kathryn Knowles  43:54

just come in in terms of seeing the deed of gift. Oh, yeah. Yeah, I wouldn’t necessarily say that’s the be all and end all for doing the policy. Because, you know, ultimately, if the gifts there the gift is there. Not everybody does gifts by deeds, either. You know, a lot of people won’t do, as I say, just, you know, giving money to family members, they just won’t even realise that that is a gift, and they won’t have done it officially through a solicitor. If there is a solicitor involved, then yes, it’s lovely to see it. But a lot of the time, it just simply won’t be there. So you will just go ahead with what you can. It’s been explained to you right now. And then but yeah, that’s fine. So yeah, I think we’re at the end late.

Lee Robertson  44:34

Thank you. Thanks, everyone, for your questions. Thanks for your attendance. Of course, thanks to Kathryn for all their experience, and we really look forward to seeing you the next one. And feel free to drop anything through in between sessions as well to Kathryn or Phillip, and any questions that you didn’t manage to ask today. But thanks again for your attendance. Thanks, Kathryn.

Kathryn Knowles  44:53

Thank you, everybody, and I’ll put the CPD certificate upon the advice of advisors website later today. So please do go on there and get your CPD certificate Thank you fantastic thank you everybody thanks all