Before any investments can be distributed, your estate will go through probate (if required). During this process, the Executor of your Will (or an Administrator if you die intestate) will assess the value of all your assets, including investments. This valuation is crucial for calculating inheritance tax (IHT).

Inheritance Tax: If the total value of your estate exceeds the IHT threshold (currently £325,000 in the UK), your beneficiaries may be liable for tax on the excess. Certain investments, like AIM-listed shares, may qualify for tax relief.



Capital Gains Tax (CGT): If investments are sold during the estate administration, CGT might apply. However, assets are typically revalued at the date of death, often mitigating large CGT liabilities.

Once taxes are settled, your investments can be transferred to your beneficiaries or liquidated and distributed as cash, depending on the instructions in your Will.

Pensions
Pensions usually fall outside your estate for IHT purposes. Most pensions allow you to name beneficiaries, and these funds can be passed on tax-efficiently, especially if you die before age 75.

Outline exactly who should inherit your investments and any conditions for their distribution.

For pensions, insurance policies, and other financial products, ensure your beneficiary nominations are up-to-date.

Trusts can provide greater control over how investments are used, particularly for young or vulnerable beneficiaries.

Estate planning for investments can be complex, especially with changing tax laws. Get in touch with us today and we will help you navigate these challenges effectively.