Making the most of current tax allowances to help your client

This article is part of
Guide to year-end tax planning

According to Mr Wright, funds held via pension schemes are usually treated as outside of the deceased’s estate and therefore free of IHT.

“Many pension vehicles such as [self-invested personal pensions] and [small, self-administered schemes] are trust-based arrangements.

"But, as pension schemes, they can provide a simple and effective IHT solution compared to a discretionary trust arrangement as the latter can prove more onerous and complex, especially in cases where significant IHT mitigation is required,” he explains.

There is no doubt that as well as being a great way to ensure clients have a decent level of income once they retire, a pension can also be a valuable tool in an individual’s tax planning and with the end of the 2019-20 tax year just around the corner, there is no better time than now for that annual review of circumstances.

Ms Tait concludes: “It is well worth discussing every year how much each client can afford to invest, as well as checking the tax limits that apply to them personally.”

Jenny Turton is a freelance journalist