A quick insight into Kensington & Chelsea

The no. of residents: 143,400 (Source: https://www.ons.gov.uk/visualisations/censusareachanges/E09000020/)

Average Sold Property Value Last 12 months: £2,268,326 (Source Zoopla: https://www.zoopla.co.uk/house-prices/london/kensington/)  

No. of businesses in Kensington & Chelsea: 18,000 businesses (Source: https://www.rbkc.gov.uk/business-and-enterprise/business-opportunities-and-procurement/borough-economic-profile ) 

Inheritance Tax Exposure: Very high

Inheritance tax services for Kensington & Chelsea residents

Considering the property values in Kensington & Chelsea, residents should be concerned about inheritance tax and how it will impact their bloodline and chosen beneficiaries. Legitimate inheritance planning strategies require expertise in the following areas (not exhaustive):

• the law in respect of gifting and settlements into trusts.
• the creation of family investment companies.
• regulated wealth management services with expertise in various tax wrappers including SIPPs, SSASs, QNUPS, QROPS, EIS.
• Knowledge of tax triggers re. CGT, CLT, Income Tax, POAT.
• Knowing how to correctly report accounts.

This must be tailored to your specific needs. 

There are not many individuals or companies with the expertise or the infrastructure to provide a comprehensive approach. We have in-house expertise in several areas, and we are set up strongly with associate partners to provide complementary services where necessary.

We’ve got inheritance tax planning in Kensington covered, ensuring more of your assets are protected and your legacy preserved. This is a complex area and it’s incredibly important to start thinking constructively about your estate planning sooner rather than later.

Understanding Inheritance Tax in Kensington & Chelsea

If you are a property owner in Kensington & Chelsea, you have a serious inheritance tax problem. Not only are average property values over the £1,000,000 which would benefit married couples, it’s also over the £2,000,000 threshold. This is because as your estate grows beyond £2,000,000, your Residential Nil Rate Band (RNRB) begins to taper by £1 for every £2 over £2,000,000. This means once your estate size gets to £2.7M, your inheritance tax free estate will be limited to only £650,000 (if you’re married). If you are single your estate only needs to get to £2.35M which would mean you’d only have the NRB of £325,000 potentially available.

London remains among the most exciting cities in the world, and the demand for homes remains high. Unless the UK government institutes an ambitious house building programme, or a complete overhaul of the international economic system which could affect bond and gilt prices, the general trend will continue to be increasing house prices. Therefore, considering the average house prices in Kensington & Chelsea today, it’s likely that it won’t be long before the £2.7M threshold is breached.

Tailored Solutions for Kensington & Chelsea Residents

As privileged residents are to be living here, their overall circumstances could be quite different to each other. It’s important to consider one’s personal circumstances and we delve quite deep to understand residents current and historical financial context, goals, concerns, and even whether they come from a family with a high life expectancy or not.  

We can usually get a good idea of the approach that is likely to be taken, subject to additional due diligence, during an initial consultation call.

Protect Your Legacy with ADL Estate Planning

It really comes down to the value you place in wanting to protect as much of your wealth as possible for your chosen beneficiaries. You may decide to leave everything to charity – totally fine, we can structure that properly too.

The more privileged you are, the more complexity there is in protecting your wealth because you’re more like to have invested in various assets and either benefitted or gifted large sums of money to family members. It’s important you’re advised by a knowledgeable team, not just through the initial advice and implementation phase but also later down the line which will give you and your family peace of mind that your family wealth is optimised and protected.

If you are a business owner who has non-immediate family members, it’s crucial to consider business succession planning to protect the various stakeholders in the business. This could include Cross Option agreements, Shareholder Protection Agreements and a specialist will which incorporates business trusts. It goes without saying, that it’s crucial this is all structured correctly.

Why Choose ADL Estate Planning?

1. Expertise: Our team consists of highly skilled professionals with extensive experience in inheritance tax planning. We have successfully assisted over 100 families in preserving their wealth for successive generations whilst also optimising how they hold their assets during their lifetime.
2. Personalized Approach: It must be personalized. We require full disclosure of your financial context to advise you on legitimate planning strategies.
3. Comprehensive Solutions: We offer a range of services designed to address all aspects of inheritance tax planning, including tax-efficient wills, trusts, and lifetime gifting strategies. 
4. Trust, Integrity, and Transparency: This is paramount. We often invest a considerable amount of time before any contracts are signed investigating your situation to determine whether we can help. Financial and legal literacy is very important to us. We know this is a daunting process. We feel privileged to be entrusted to assist you and your family with some of the most sensitive and yes complex areas. We will educate you.

If we think we can help you, we will tell you. If we can’t, we will explain the challenges, which could be because you’ve left things far too late, and your health has deteriorated which means you may not be able to survive at least 2 years. We could also determine the overall cost of any planning, which may include paying some tax during lifetime plus our advice charges and whether this would be cost-effective.

During the initial call we’d give you an idea of our fees. Generally, our advice and implementation fees are at least £5,500 + VAT but could reach far higher depending on your circumstances. 

We’re good at what we do. You’re in good hands.

Take Control of Your Inheritance Tax Obligations Today

Don’t let inheritance tax concerns overshadow your estate planning journey. Contact ADL Estate Planning today and take the first step towards securing your legacy for generations to come. Our team is ready to provide you with expert advice and practical solutions tailored specifically to your needs. Say goodbye to inheritance tax worries in Kensington – let us guide you towards a brighter financial future.

FAQ’s Kensington residents ask us about IHT planning

We understand that inheritance tax planning can be a complex topic. To help Kensington residents navigate this process more easily, we have compiled a list of frequently asked questions (FAQs) about inheritance tax planning in Kensington. Look at the answers below to gain a better understanding of how we can assist you in preserving your wealth and protecting your loved ones’ future.

Q: What is inheritance tax, and how does it affect me as a Kensington & Chelsea resident?

A: Inheritance tax is a tax generally levied on the estate of a deceased person; it’s currently set at 40%. 

The biggest concern with Kensington & Chelsea residents is that on their property alone there is a sizeable inheritance tax problem because the average property value exceeds £2M. 

Residents could also have other assets such as cash, ISAs, general investment accounts, artwork, all of which will only exacerbate the problem. It’s a good problem to have. It’s solve-able provided you act soon. Acting simply means getting some initial advice to see exactly where you are with respect to any planning that may be needed, which could be immediately or later in life.

Here’s some key terms you should know which will apply to all residents in Kensington & Chelsea:

Nil Rate Band (NRB): Currently set at £325,000. Should your estate be equal to or less than this, you don’t have a problem with inheritance tax.

Residential Nil Rate Band (RNRB): Currently set at £175,000. Should you own your current home or still own a former home and have lineal descendants e.g. children that you intend to leave this property too, then you can benefit from this extra inheritance tax free amount.

Transferable Nil Rate Band (TNRB):  For those who are married or in a civil partnership. Any unused proportion of the NRB following the death of the first spouse can be carried over to be used against the surviving spouse’s personal estate only on their death.

Transferable Residential Nil Rate Band (TRNRB): Similar to the NRB but relates to the RNRB.

Taper threshold: £2,000,000. Should your estate excluding pensions exceed this figure then your RNRB and any TRNRB will be reduced by £1 for every £2 over £2M. This means for married couples, once the estate reaches £2.7M, you may only have the NRB and TNRB available. 

The larger the estate, the bigger the problem, and the larger the impact of any third-party claims. Advice is needed to protect wealth to ensure that your chosen beneficiaries receive the maximum benefit from your estate.

Q: How can ADL Estate Planning help me with inheritance tax planning in Kensington?

A: ADL Estate Planning specializes in providing tailored solutions for inheritance tax planning in Kensington. Our experienced advisors will assess your unique circumstances and develop a comprehensive plan to minimize your tax liability. We offer a range of services, including tax-efficient wills, trusts, and lifetime gifting strategies, all designed to protect your assets and ensure your wishes are met.

Q: Is it too late to start inheritance tax planning if I haven’t done so yet?

A: It could be.

Q: How do I get started with ADL Estate Planning for my inheritance tax planning needs in Kensington?

A: Getting started is simple. Simply reach out to our team at ADL Estate Planning, and we will schedule a consultation with one of our expert advisors. During the consultation, we will discuss your goals, assess your estate, and provide personalized recommendations tailored to your specific needs.

Don’t see your question listed here? Contact ADL Estate Planning today, and our knowledgeable team will be happy to address any additional enquiries you may have regarding inheritance tax planning for Kensington & Chelsea residents.