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Landlords: Mitigating Inheritance Tax When Passing On Property And Personal Assets

Introduction

Inheritance Tax (IHT) can be tricky to understand, but its impact can mean less money ends up in the pockets of your loved ones.

Landlords face additional considerations and potential barriers when it comes to Inheritance Tax (IHT) planning. Whether you opt to retain, sell, or gift a property, tax liabilities can arise for buy-to-let landlords. Amidst various choices, it’s easy to overlook other methods to diminish the size of your overall estate as well.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

At a glance

  • You can reduce Inheritance Tax (IHT) or Capital Gains Tax (CGT) liabilities on your properties with careful planning and expert advice.
  • Starting your estate planning in your 60s and 70s can make a real difference to your IHT or CGT tax bills, and mean you leave more to your loved ones.
  • Bespoke trust solutions may help you reduce your estate for IHT purposes while retaining some form of access to your investments.

Trusts are not regulated by the Financial Conduct Authority.

Simplifying a daunting process

What will be counted as part of my estate?

Upon your death, all your possessions, including savings, assets like property, ISAs, and shares, constitute your estate. Inheritance Tax is typically charged at 40% on assets outside of the Nil-Rate band of £325,000 per individual. When passing on your primary residence to your direct descendants, you may also benefit from the Residence Nil-Rate Band amounting to a further £175,000.

It’s evident how a property investor accumulating holdings over several years could surpass £2 million or more. Once your estate exceeds £2 million, some tax allowances are reduced or become unavailable for Inheritance Tax (IHT) purposes.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

How much does my estate need to be worth to be liable for IHT?

The first step in reducing your Inheritance Tax (IHT) liability is understanding how it operates. Everyone is entitled to a Nil Rate Band (NRB) threshold of £325,000. This threshold allows you to leave assets to ‘non-exempt’ beneficiaries, such as children, grandchildren, or other family members, without triggering IHT. However, if you leave more than this amount to non-exempt beneficiaries, IHT becomes payable on the excess.

If you pass away leaving your entire estate to a UK domiciled spouse or civil partner, it allows them to use any unused percentage of your NRB threshold upon their death. Consequently, they can leave assets up to 100% of the value of two unused NRB thresholds (currently £650,000) to non-exempt beneficiaries without incurring IHT.

Furthermore, if you leave your home to children or grandchildren, you may be eligible for an additional tax-free threshold called the Residence Nil Rate Band (RNRB), currently set at £175,000 for individuals. This threshold doubles to £350,000 upon the second death for married couples or civil partners who haven’t used any percentage of the RNRB on the first death.

Moreover, if you donate 10% or more of the net value of your estate to charity upon death, the rate of IHT applied to gifts exceeding the NRB to non-exempt beneficiaries is reduced from 40% to 36%.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

What will happen if I decide to keep a buy-to-let property, and pass it on?

If you pass away owning property, your beneficiaries will inherit the property without any historical capital gain, but it will still be considered part of your estate for Inheritance Tax (IHT) purposes. IHT is levied at a rate of 40%, so if you die with a property valued at £400,000, and the nil rate band has already been utilised, your beneficiaries may need to pay £160,000 to HMRC.

However, IHT becomes a more significant concern if the estate exceeds the nil rate band. In such cases, if you only own one or two buy-to-let properties along with few other assets, retaining the property may be advantageous.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

What will happen if I decide to sell any of my buy-to-let properties?

If you sell a property that you’ve never lived in, it becomes subject to Capital Gains Tax (CGT) if its current value exceeds the purchase price. CGT is imposed on the gain or profit you’ve realised. For residential property, CGT rates are 18% for basic rate taxpayers and 24% for higher rate taxpayers. The rate of CGT payable will depend on your other income.

However, there are avenues to potentially reduce your CGT liability. If the property was your main residence at one point, you may qualify for Main Residence Relief, which can lessen the amount of tax owed. Additionally, any expenditure on renovations can be deducted from the sale price to calculate your net gain. Selling a property offers the opportunity to reinvest the proceeds, potentially leading to further growth in a more tax-efficient environment, including one with reduced Inheritance Tax (IHT) implications.

It’s crucial to note that if you sell or gift a property just before your death, both CGT and IHT may apply, affecting you and your family financially.

While investing sale profits into an ISA can offer tax benefits concerning income and capital gains tax, they are still considered part of your estate for IHT purposes upon your death. Pension funds, however, are generally excluded from your estate.

Ultimately, the outcome will hinge on your individual circumstances, such as age, health, and other factors. These decisions are among the most significant financial choices you’ll make in your lifetime, underscoring the importance of consulting a financial adviser to explore your options thoroughly.

The value of an investment with SJP will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Can I make gifts to mitigate IHT?

You have several options to gift money without it being included in the final calculation of your estate for Inheritance Tax (IHT) purposes.

Firstly, you can give away up to £3,000 each tax year, known as your ‘annual exemption’, in addition to the ‘small gifts exemption’ for making any number of small gifts up to £250 per person, to any number of individuals as long as you have not used another allowance on the same person. These gifts are exempt from IHT.

Furthermore, the £3,000 annual exemption can be carried forward for one tax year, allowing you to give away £6,000 in a single tax year if you made no gifts in the previous year.

Gifts exceeding the £3,000 allowance are still exempt from IHT as long as you survive for seven years after making the gift. However, gifts made within the seven years preceding your death will be added back into your estate, potentially using up some or all of your nil rate band. If the gift surpasses the nil rate band, some tax may be due. Nonetheless, if you survive the gift by at least three years, the amount of tax payable decreases on a sliding scale, meaning the longer you live, the less tax is owed. This approach not only supports your family during your lifetime but also reduces your IHT liability afterward.

Additionally, if one of your children or grandchildren is getting married, each parent or grandparent can gift up to £5,000 to the child or £2,500 to the grandchild. This gesture can provide a new marriage or civil partnership with a financial boost, aligning with your intentions.

Finally, gifts made regularly from surplus income are also exempt from tax, provided you can demonstrate that they do not impact your usual standard of living.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

Can I gift my properties during my lifetime?

Many landlords consider gifting property during their lifetime as a strategy to reduce the size of their estate for Inheritance Tax (IHT) purposes.

If you don’t rely on the rental income from the property, an outright gift might be an option. This is known as a Potentially Exempt Transfer (PET). If you survive for seven years after making the gift, there will be no IHT to pay. However, once the property is gifted, you lose control and flexibility with no possibility of reversing the decision.

Gifting a property constitutes disposing of an asset, potentially triggering Capital Gains Tax (CGT) if the property has appreciated in value.

Alternatively, you could gift the property into a Discretionary Trust, offering more control. By transferring the property to such a trust, the transfer is a chargeable transfer for IHT, but you might qualify for a relief allowing you to defer CGT payment until the trustees sell the property. If you survive for seven years after making the gift, the property will not be considered part of your estate, resulting in no 40% IHT liability, similar to a Potentially Exempt Transfer.

Considering this option requires guidance from a financial adviser.

It’s important to note that when gifting any asset, you must survive for seven years. Failure to do so means the gift reverts to your estate, potentially leading to double taxation – CGT when making the gift and IHT upon death.

My properties are part of my retirement income – what happens if I give them away?

If you’re deriving income from your rental properties, or intend to do so in retirement, the situation becomes more intricate. If you gift the entire property – whether to your children or into a trust – while continuing to receive an income, it’s considered a Gift with Reservation. In this case, the property remains part of your estate despite the transfer.

However, there may be an option to gift only a portion of the property into a specialised trust, retaining the right to receive income without violating the gift with reservation rules. Seeking advice from a solicitor to determine whether a trust is suitable for your circumstances will ensure your financial plans align with your long-term goals.

There’s a limit of £325,000 that can be gifted into a lifetime trust within any consecutive seven-year period. Exceeding this threshold incurs a 20% IHT on the surplus. Additionally, if the property being gifted to the trust has appreciated in value since acquisition, you may also be subject to CGT.

Gifting and trusts can be highly advantageous and tax-efficient strategies for legacy planning. Trusts, in particular, offer versatility, but it’s essential to seek expert guidance and discuss your options with a financial adviser or solicitor before establishing a trust.

The levels and bases of taxation and reliefs from taxation can change at any time and are dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

The value of financial advice and IHT planning

Inheritance Tax (IHT) is a highly intricate area, and very few individuals are familiar with every rule, exemption, and allowance, or how to leverage them effectively.

Given that your assets may fluctuate in value over time, regular reviews of your financial situation are crucial as they will impact your IHT liability. Additionally, it’s advisable to consult with a financial adviser whenever you engage in property transactions or contemplate doing so. They can offer guidance to ensure that your choices are tax-efficient for both you and your beneficiaries.

Taking proactive steps in Inheritance Tax planning while you’re in good health enables you to create a more secure financial future for those you care about.

SJP Approved 21/05/2025

Should you require more information or have particular questions, we invite you to contact us at your convenience.

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Using a Life Cover Insurance Plan Written in Trust to Meet an Inheritance Tax (IHT) Liability

Introduction

Inheritance Tax (IHT) can be tricky to understand, but its impact can mean less money ends up in the pockets of your loved ones. This is even more so the case as pensions will form part of your estate from 2027. A solution could be to write a Life Cover Insurance Plan into Trust.

Tax allowances such as the residence nil-rate band (RNRB) begin to fall away for estates valued in excess of £2 million. In the case of the RNRB, this is tapered by £1 for every £2 an estate exceeds £2 million.

What is a Life Cover Insurance Plan?

Life insurance offers a tax-exempt payout to a chosen beneficiary upon your death.

This insurance comes in two forms; term assurance and whole of life assurance.

Term assurance covers you for a set duration. It is often chosen to safeguard against debts that will diminish or conclude over time, like a mortgage repayment, or to ensure there is a fund available for specific future expenses, such as your children’s education costs.

Whole of life assurance, on the other hand, guarantees a payout at the time of death, as long as the premiums have been consistently paid throughout the policy’s term.

Whole of life policies are generally aimed at addressing financial responsibilities that will arise at your death, regardless of its timing, like covering an inheritance tax bill or enhancing the inheritance you leave behind. These plans are suitable when the need for coverage is indefinite or unclear.

How can a Life Cover Insurance Plan help pay towards an Inheritance Tax (IHT) bill?

Over and above gifting sufficient assets to reduce your gross estate value to within £2 million, if you have excess income during your retirement, it might make sense to consider a Life Cover Insurance Plan written in trust, to meet the eventual IHT liability, which could be as high as £400,000 on an estate valued at £2 million.

It is important that the Life Cover Insurance Plan is written into Trust, and that the premiums are paid using excess income, rather than from assets – otherwise, the premiums paid could be treated as a chargeable lifetime transfer (CLT).

Note that probate is required to release estate assets, and IHT needs to be paid before probate is granted. Therefore, an estate’s assets cannot be directly used to meet IHT liability, and an alternative solution such as life cover in trust provides the funds required.

How much might a Life Cover Insurance Plan cost?

As of May 2025, a guaranteed whole of life joint plan with a sum assured of £400,000 would cost £6,366 per annum, assuming a 65-year-old male non-smoker and 65-year-old female non-smoker insured through Vitality, and not including ‘waiver of premium’ as an additional option. These figures are based on guaranteed premiums, meaning the provider cannot change the premium as you get older.

Guaranteed whole of life cover provides certainty; if the premiums are paid until death, then the sum assured will pay out. To put the figures in perspective, a 65 year old woman has a life expectancy of 24 years. By the time she is 89, she would have paid around £153,000 in premiums, but the payout from the plan would be £400,000 on second death. If the woman lives to 100, she will have paid £223,000 in premiums, and the payout from the plan would still be £400,000 on second death.

The value of financial advice and Inheritance Tax (IHT) planning

IHT is a highly complex area and very few people know every rule, exemption and allowance, or how to use them.

As your assets increase or decrease in value, your IHT liability will change and regular reviews of your financial position will therefore be important. It’s always a good idea to get in touch with a financial adviser whenever you buy or sell property too, or if you’re thinking of doing so. They can help make sure the choices you make will be tax-efficient for you – and those you leave behind.

Making confident decisions about Inheritance Tax planning while you’re still fit and healthy helps to create a better world for everyone you care about.

Appointing an expert wealth manager may enable you to capitalise on tax efficiencies such as these, mitigating paying unnecessary tax in your retirement and in the event of your death.

The levels and bases of taxation and reliefs from taxation can change at any time.

Tax relief is generally dependent on individual circumstances.

SJP Approved 21/05/2025

Should you require more information or have particular questions, we invite you to contact us at your convenience.

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Taking Retirement Income: Tax in Retirement and Drawing Down

Introduction

There’s much greater flexibility when it comes to retirement income these days, but there are also a few traps waiting for the unwary.

It used to be that when you reached retirement, your journey as a pension investor effectively ended. That’s no longer the case, thanks to the 2015 reforms to Defined Contribution (DC) pensions, which have resulted in many people remaining invested during retirement. The process is now much more seamless, and in some cases very little really changes.

But some things do change, and it’s important to be aware of them. Perhaps the most obvious is the way in which you’re taxed once you begin to take an income in retirement. While there are more opportunities for tax-efficiency these days, there are also a few more pitfalls that need to be avoided.

What you need to know

A new tax regime

During your working life you generally didn’t have to think too much about which income would be taxed, because it would usually be your earnings. And you may well be aware that while you can still be charged Income Tax in retirement, you don’t pay National Insurance on investment income or on any earnings after hitting State Pension age.

But the tax situation is suddenly quite different in other ways too. From a tax perspective, you can now control much more about how you take your income and how much tax you pay. You could well have pensions, Cash ISAs, Stocks & Shares ISAs, property, earnings and so on. But how you extract money from that, and use it as income, is treated and taxed differently.

The best course of action won’t always be obvious. For many of those who are deciding where to take an income from once they’ve retired, the starting point will be their pension – but while the first quarter of your DC pension pot can be taken tax-free, people often forget that anything above that 25% will be taxed at your marginal rate. In other words, the way the pension is taxed makes it worth exploring other options.

For example, income from your ISA won’t be taxed, giving you flexibility to take your income from one place and not another, or to have a mix. A lot of people don’t necessarily realise this and they would rely heavily on a pension income that’s taxed, perhaps because they’re not aware of other ways of doing it. This is where an adviser can step in and help you, simply by knowing which levers to pull.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

Steering clear of the traps

There’s one failsafe way to ensure you don’t end up paying more tax in retirement than you need to – get pension advice from someone who knows the costly mistakes to avoid.

When you’re approaching retirement, you should speak to an adviser to ensure you’re taking income in the most tax-efficient way, because it is quite different from how you’re taxed when you’re working. This applies to anyone leading up to and entering retirement. And it can be especially pertinent for those reaching retirement with both DC and Defined Benefit (DB, or final salary) pension pots.

That’s because the income from a DB pension will be paid to you whether you want it or not, and it will be taxed. So, it’s important to know which incomes you’re going to get anyway and which incomes you have more flexibility with.

An adviser can help you see the bigger picture and understand which of your assets are subject to which tax regime when you take money out. It’s a time of life when a lot of people want to take lump sums, and there are important decisions to make, so you don’t want to take your eye off the ball at the last minute.

Planning for your retirement can be overwhelming, but Apollo can help you begin the journey of budgeting for your later years. If you’re thinking of starting a pension or would like to review your existing pension plans, it’s a good idea to get advice.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is generally dependent on individual circumstances.

You can also access free impartial pensions guidance from the Pension Wise website, or you can book an appointment over the telephone: 0800 011 397.

SJP Approved 21/05/2025

Should you require more information or have particular questions, we invite you to contact us at your convenience.

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Giving Your Children and Grandchildren a Head Start

Introduction

While money isn’t the be all and end all, it undeniably offers children a significant advantage. A nest egg can contribute towards their education, grant access to diverse opportunities, and give them a head start in their adult lives.

Saving now provides them with greater flexibility to pursue their desired paths when the time comes. It’s another avenue through which you can afford them the best possible start in life.

The cost of growing up

Raising children can be financially challenging. While families may cover many of the costs of raising young children through their income, having a financial reserve as adulthood nears can be invaluable.

As young adults approach major milestones such as purchasing their first car, attending university, or buying their initial home, significant expenses arise.

By providing support, you can assist them in pursuing their aspirations. Starting to save early ensures they’ll have greater opportunities as they grow older.

01

£48,470

The average debt of a student leaving an English university in 2024
Source: Statista, December 2024
02

£151,731

The average deposit for a first-time buyer in Greater London
Source: UK Finance Key Mortgage Market Data, February 2025
01

£48,470

The average debt of a student leaving an English university in 2024
Source: Statista, December 2024

02

£151,731

The average deposit for a first-time buyer in Greater London
Source: UK Finance Key Mortgage Market Data, February 2025

Start early

You don’t have to allocate a substantial sum each month to establish a solid nest egg for a child. The crucial step is to commence saving as early as possible.

Beginning to save when children are young offers the advantage of time. It’s remarkable how even modest amounts saved consistently can accumulate over time. The power of compounding, combined with prudent investment decisions, has the potential to substantially enhance the value of your fund as children mature.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and may fall as well as rise. You may get back less than the amount invested.

Savings that work for everyone

You might choose to save a modest sum monthly, or invest lump sums as it fits your circumstances.

Your choice may be grant the funds to your child/ grandchild at age 18, or you might prefer to maintain control for a longer period of time.

Regardless of your preferences, selecting an investment solution that provides a suitable balance of flexibility, tax efficiency, and accessibility is crucial.

Invest in a Junior ISA

Junior ISAs represent an opportunity for saving towards a child’s future. The funds are inaccessible until the child reaches their 18th birthday.

These accounts can be set up by a parent or legal guardian, however further contributions can be accepted from anyone once the account has been set up. Regular deposits or one-time payments up to the annual limit (currently £9,000) are permitted, with all income and gains being exempt from Income Tax and Capital Gains Tax.

Upon reaching the age of 18, the Junior ISA automatically turns into an adult ISA which offers further flexibility to invest or withdraw funds as desired.

Junior ISAs offer the choice between cash or stocks and shares options. While cash is perceived as lower risk, considering the potentially lengthy investment term of up to 18 years, stocks and shares Junior ISAs typically offer superior returns over time. Although it is possible to spread the risk by subscribing to both a cash Junior ISA and a stocks and shares Junior ISA – provided the annual limit is not exceeded.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

An investment in a Stocks and Shares ISA does not provide the security of capital associated with a Cash ISA.

The favourable tax treatment of ISAs may not be maintained in the future and is subject to changes in legislation.

Please note that St. James’s Place does not offer Cash ISAs.

Set up a trust

Another frequently overlooked option is establishing a bare trust or designated investment account for a grandchild. Typically, the funds are invested in a portfolio of unit trusts, offering the benefits of professional management, risk reduction through diversification, and tax efficiency.

This straightforward legal arrangement of setting up a bare trust is an excellent solution for grandparents seeking to invest money for a grandchild. Until the beneficiary turns 18 and assumes ownership of the investment, the grandparents retain control over the funds. Subsequently, the grandchild can independently make decisions about the plan.

Unlike a Junior ISA, there are no limits to how much you can invest in a bare trust. The assets are held by a trustee, usually the parent or grandparent, for the child’s benefit until they reach 18 (or 16 in Scotland).

As long as the investment is made by someone other than the parents, the assets are taxed as if they belong to the child, which usually means there is little or no tax to pay on any income or gains.

This information applies for bare trusts in England. Bare trusts work differently in other regions.

Payments into bare trusts are considered to be gifts for inheritance tax purposes.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds selected and the value may fall as well as rise. You may get back less than the amount invested.

The levels and bases of taxation, and reliefs from taxation, can change at any time and are generally dependent on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

Start a pension

While initiating a pension for a child might initially appear unusual, for certain families, it can be a highly astute decision.

These pensions can be established by a parent or legal guardian, with contributions welcomed from anyone once they’re set up.

The blend of tax efficiency and an investment horizon potentially spanning over 60 years presents an exceptional opportunity for wealth growth. Even a single lump sum payment into a child’s pension could significantly enhance their retirement savings and alleviate some financial burdens in adulthood.

Moreover, if concerns arise regarding how a child might utilise the saved funds, there’s the added advantage that the money will remain beyond temptation’s reach until they reach retirement age.

You can put a maximum of £2,880 into a pension for a child each year. Tax relief will boost it to £3,600.

Investing the maximum £3,600 each year into a pension fund from birth until a child turns 18 could create a pot worth £1,030,000 by age 65.*

*Assumes an annual growth rate of 5% net of charges.

These figures are examples only and are not guaranteed. What you get back will depend on your investment performance and the tax treatment of your savings. You could get back more or less than this.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

SJP Approved 21/05/2025

Should you require more information or have particular questions, we invite you to contact us at your convenience.

Contact Us

Pensions: Explaining The Tapered Annual Allowance

Introduction

For those earning a high income, it’s essential to understand the implications of the Tapered Annual Allowance on making pension contributions. This guide offers an overview of the tapered annual allowance and its operational mechanism.

Understanding when the Annual Allowance is Tapered

Pension tapering regulates the amount high-earning individuals can contribute to their pensions annually while still receiving the full benefits of tax relief.

For the 2025/26 tax year, the standard annual allowance is set at £60,000. Nonetheless, those earning a higher income may see their allowance reduced to as low as £10,000, based on their total yearly income.

Individuals with a ‘threshold income’ over £200,000 and an ‘adjusted income’ over £260,000 are subject to the tapered annual allowance. The reduction in allowance halts when ‘adjusted income’ exceeds £360,000, setting the annual allowance to a minimal £10,000 for pension savings that receive the full benefit of tax relief.

Broadly, ‘Threshold Income’ includes all taxable income received in the tax year, including rental income, bonuses, dividend, and other taxable benefits.  From this you deduct any personal pension contributions to personal pension scheme.

‘Adjusted income’ includes all taxable income plus any employer pension contributions and most personal contributions to an occupational pension scheme.

Mechanics of the Tapered Annual Allowance

Individuals exceeding both a ‘threshold income’ of £200,000 and ‘adjusted income’ of £260,000 will experience a reduction in their annual allowance by £1 for every £2 exceeding £260,000 in adjusted income.

For instance, an ‘adjusted income’ of £280,000 reduces the annual allowance by £10,000, resulting in a £50,000 allowance instead of £60,000.

Tapered Annual Allowance and Carry Forward

The tapered annual allowance does not prohibit the use of carry forward rules, which permit the transfer of unused annual allowance from the previous three tax years. The tapered allowance for each year determines the amount that can be carried forward.

Employer Contributions and Exceeding the Tapered Annual Allowance

The tapered annual allowance applies to all pension contributions, including those made by employers. Exceeding your annual pension allowance incurs an annual allowance charge at your highest marginal income tax rate.

Calculating Your Tapered Annual Allowance

Determining your adjusted and threshold income can be complex. Additional information on calculating your tapered annual allowance is available on the Government’s website, and consulting an expert Adviser or tax specialist is advisable for tailored planning.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

SJP Approved 21/05/2025

Should you require more information or have particular questions, we invite you to contact us at your convenience.

Contact Us

Investment Management

Introduction

By grasping your objectives, investment timeframe, and tolerance for risk, we are equipped to tailor an investment strategy that aligns with your needs.

You can take comfort in the fact that our choices are based on thorough analysis. We aim to build a diversified portfolio for you, integrating an appropriate combination of asset types from various geographical areas through a variety of investment approaches.

This will be carefully adjusted to resonate with your principles, allowing you to concentrate on life’s priorities, knowing that we are diligently applying our investment skills to oversee and safeguard your assets with the greatest diligence.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

Curation

Our approach involves confidently steering through the markets for you, adopting a comprehensive perspective on investment opportunities to capitalise on potential gains.

St. James’s Place extensive knowledge of the market and strategic connections enable them to identify, assess, and offer clients attractive and varied investment opportunities.

Our approach to financial and investment management is based on your unique goals. To understand your goals and provide peace of mind throughout your life, we will work with you in three different ways: 

PLAN: When aiming towards longer-term financial goals, such as a comfortable retirement, you’ll need a detailed plan. We’ll work together to agree a plan that works for you. 

DESIGN: After considering your time horizon and attitude to risk, we can design an investment portfolio to match the plan. 

REVIEW: Market conditions change. So can personal circumstances. We’ll keep a close eye on your investments to help them stay on track. 

We hold the conviction that long-term investment, spanning decades rather than days, is the most effective strategy to fulfill your life’s goals.

Need a bespoke financial plan crafted specifically for your unique requirements?

Book a Demo

Fund selection

From the world’s best fund managers

Top-tier investment expertise isn’t confined to a single company or place. In order to optimise the management of your investments, we tap into the abilities of some of the most skilled fund managers globally.

As a Senior Partner Practice of St. James’s Place, our clients benefit from economies of scale and the best-in-class fund managers and products.

Controlled by the St. James’s Place Investment Committee

St. James’s Place engages external supervision in handling your investments. This worldwide network of fund managers and essential strategic partners minimises bias and guarantees diverse investment perspectives. We also have a wide range of comprehensive expertise within our practice.

You can be confident that we will pinpoint the most fitting investment strategies for you, supported by data and analytics. Trust us to balance opportunity and risk, with our sights set on achieving your long-term objectives.

The Investment Committee features independent participants who contribute experience and specialised insight, affirming the integrity of their process and decisions.

St. James’s Place Investment Management Approach

Our Value Assessment Statement examines the benefits you gain from our services, based on the investment management approach.

It outlines the ways we offer value, describes the measures we’ve implemented in the last year, and identifies areas for further improvement.

This initiative underscores our dedication to presenting transparent and equitable details regarding your investments with us.

SJP recognises that no single investment house has a monopoly on investment expertise, so don’t employ in-house investment managers. Instead, SJP carefully select a number of external managers to manage the range of funds. 

This has a number of benefits: 
  • It gives us the freedom to choose from some of the best managers in the world 
  • It means SJP can change a manager at short notice if the need arises, without inconvenience to you 
  • It gives you a real opportunity to diversify your investments by spreading your money across funds managed by different managers with different styles. 

Key to the distinctive approach is the ability to identify and select fund managers from around the world. Contracting out fund management gives greater freedom and the flexibility to source investment expertise on a global scale, giving you diversification and investment expertise that is beyond the scope of many wealth advisers. 

The value of an investment with  St. James’s  Place will be directly linked to the performance of the funds you select, and the value can therefore go down as well as up. You may get back less than you invested. 

Should you require more information or have particular questions, we invite you to contact us at your convenience.

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Access to Specialist Banking and Lending Services

Introduction

As part of our wealth management offering, via SJP’s Private Client team, we can refer you to a range of solutions that have been developed specifically for our clients with more specialist banking and lending requirements. Your adviser will work with SJP’s Private Client team to understand both your current and future needs as well as your servicing preferences, in order to create a solution to your individual circumstances.

Over the years, St. James’s Place has built strong relationships with a panel of carefully selected private banks. The panel comprises boutique banks, offering a range of different specialisms, styles and service levels. We can help you choose the bank that best meets your needs and facilitate the introduction to the bank selected, saving you the hassle and time of searching through a multitude of options.

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Services offered

Cash management

By using SJP’s Cash Deposit Service, powered by Flagstone, we can help spread your cash savings to capitalise on market-leading interest rates, and maximise FSCS protection across multiple institutions.

Please note that this is a referral service and the services provided are separate and distinct to those offered by St. James’s Place.

Mortgages

Our advisers can act like a ‘broker’, securing off-market products, and finding lending solutions for your residential or buy-to-let purchases, and provide access to solutions for commercial purchases, as part of your broader financial plan.

Your home or other property may be repossessed if you do not keep up repayments on your mortgage.

Commercial and some buy-to-let mortgages are not regulated by the Financial Conduct Authority.

All enquiries for commercial mortgages will be referred to a service that is separate and distinct to those offered by St. James’s Place.

Investment-backed lending

If you require short-term financing, you may be able to use eligible St. James’s Place and Rowan Dartington investments as security.

St. James’s Place and Rowan Dartington work with Metro Bank to make this short-term lending facility available to you, secured against your investment portfolio.

If the value of the investment falls in relation to the agreed loan facility, the loan may need to be repaid in full. Metro Bank will take a charge over your investments and you will be unable to make any withdrawals from your charged investments without prior approval from the bank. Rates and charges will apply. Please get in touch for full details.

Please note that these services are separate and distinct to those offered by St. James’s Place.

Foreign currency exchange

Whether you’re buying foreign property, sending money to loved ones or moving overseas, we are able to provide access to a currency exchange service provided by TorFX, offering foreign exchange and international payment services.

Please note that this is a referral service and the services provided are separate and distinct to those offered by St. James’s Place.

“Many wealthy clients have complex borrowing needs, which are not well-served by high street banks. We can introduce individually tailored solutions.”

How could a private banking service benefit you?

Through a panel of private banks, we can provide access to a full private banking service offering, via SJP’s Private Client team, including current accounts, deposit accounts, payment services, trustee and executor accounts and foreign currency accounts. More importantly, you will experience a bespoke service, with dedicated bankers and their teams looking after your day-to-day requirements.

The private banks on the panel specialise in truly understanding your individual requirements to ensure you receive a personal and seamless service. Many wealthy clients have complex borrowing needs, which are not well-served by high street banks. Alongside your adviser, our SJP’s Private Client team can review your circumstances and requirements, assess which private bank(s) might best meet these, and seek individually tailored solutions allowing you to choose the option most attractive to you.

These services are available to clients meeting the banks’ criteria, these usually being minimum personal net wealth of £3m to £5m+ and/or annual income in excess of £300,000.

Should you require more information or have particular questions, we invite you to contact us at your convenience.

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Estate and Inheritance Tax (IHT) Planning

Introduction

Looking ahead towards estate planning and mitigating inheritance tax (IHT) is key to managing and protecting your wealth, for you and your family. A large proportion of your wealth might be subject to inheritance tax when you die, at up to 40%. This includes assets such as properties, investments, and even old family heirlooms. From April 2027, unspent pensions will also form part of your estate for inheritance tax purposes; requiring a change in approach to estate planning.

Careful IHT planning is all about passing as much of your estate as possible to who you want to receive it, and reducing the inheritance tax liability payable. It’s also about maintaining flexibility and control over any arrangements that are made.

ESTATE PLANNING

The levels and bases of taxation, and reliefs from taxation, can change at any time.  The value of any tax relief is dependent on individual circumstances.

Will writing involves the referral to a service that is separate and distinct to those offered by St. James’s Place. Wills, along with Trusts are not regulated by the Financial Conduct Authority.

Background to inheritance tax (IHT)

The majority of your assets will be subject to IHT if, when you die, the value of those assets exceeds the standard nil-rate band which currently stands at £325,000. If your spouse dies before you without fully using their nil-rate band, any unused percentage can be carried forward to use when you die, subject to a claim being made by your executors within two years of your death.

With the family home often making up a large percentage of an estate, the government has introduced an additional nil-rate band on top of the £325,000, known as the ‘residence nil-rate band’. The current residence nil-rate band is up to £175,000.

This means that if you give away a home that you have lived in as your main home to your children (including adopted, foster or stepchildren) or grandchildren, they won’t have to pay IHT on the first £500,000 (£325,000 nil rate band + £175,000 residence nil-rate band).

If you are a married couple or in a civil partnership then you can combine both your nil-rate bands, meaning that the first £1 million of your assets, including your property, are free from IHT.

The value of all assets in excess of the nil-rate band and the residence nil-rate band will be taxed at up to 40% – paid for by your estate.

However, when the value of an estate exceeds £2 million, the residence nil-rate band is tapered, by £1 for every £2 above this level. You need to consider the value of the estate on each respective death.

The levels and bases of taxation and reliefs from taxation can change at any time. Tax relief is generally dependent on individual circumstances.

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Key tax-efficient solutions

Gifting assets

Should you be worried about how Inheritance Tax (IHT) could impact your estate and the wealth you wish to transfer, incorporating a Gift Plan into your wealth management approach might serve as an excellent solution. Our Gift Plan combines an investment bond (either onshore or offshore), with either an absolute or discretionary trust which is controlled by you and benefits those who you want it to.

Assets held within a discretionary trust do not become part of the beneficiary’s estate as long as they remain in the Trust. This plan is versatile, serving various purposes including maximizing exemptions from Inheritance Tax (IHT) or covering educational expenses.

The value of an investment with St. James’s Place will be directly linked to the performance of the funds you select and the value can therefore go down as well as up. You may get back less than you invested.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

Trusts

A Trust ensures that the correct funds are delivered to the right people at the appropriate moment, offering flexibility, innovation, and control that may not be possible with a Will alone.

It’s understandable to assume that estate planning primarily concerns the distribution of your assets posthumously. However, its scope extends beyond that, encompassing the current organisation of your wealth to enhance its utility, whether for protecting your loved ones or reducing tax implications.

Trusts are not regulated by the Financial Conduct Authority.

Life Cover Plan written into Trust

Over and above gifting sufficient assets to reduce your gross estate value to within £2 million, if you have excess income during your retirement, it might make sense to consider a life cover plan written in trust, to meet the eventual IHT liability, which could be as high as £400,000 on an estate valued at £2 million.

It is important that the life cover plan is written into trust, and that the premiums are paid using excess income, rather than from assets – otherwise, the premiums paid could be treated as a chargeable lifetime transfer (CLT).

Note that probate is required to release estate assets, whereas IHT needs to be paid before probate is granted. By placing a life policy in trust the sum assured will be paid into trust and can be used to meet some/all of the IHT liability. This means the executors will not necessarily need to realise the sale of other assets, such as property and investments, in order to meet the said liability – particularly advantageous if markets are underperforming at the point in time that the sale of assets otherwise needs to be realised.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

Trusts are not regulated by the Financial Conduct Authority.

Business Relief

Typically, a trading business is eligible for 100% Business Relief from Inheritance Tax (IHT), allowing it to be transferred to heirs without incurring IHT upon the owner’s demise.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

An example inheritance tax calculation

A husband died five years ago, having left all of his assets to his wife. He had not made any gifts in his lifetime. His estate was worth below £2 million.

When his wife dies, her estate includes a property worth £1.2 million, and various other assets such as savings amounting to £1.1 million.

If the couple were able to reduce the gross value of their estate to under £2 million (for example by gifting sufficient assets more than seven years before their deaths), thus restoring their full residence nil-rate bands.

BeforeAfter
Gross estate value£2,300,000£2,000,000
Less 2x nil-rate band-£650,000-£650,000
Less 2x residence NRB-£350,000 – £150,000
(Tapering: £300,000/2 = £150,000)
= -£200,000 tapered RNRB		-£350,000
Net estate£1,450,000£1,000,000
IHT due at 40%£580,000£400,000

Gifts that are not covered by any of the available exemptions may be taxable where death occurs within seven years if they exceed the available nil-rate band. Inheritance Tax (IHT) payable on those failed gifts may be reduced in the form of taper relief. Taper relief operates by reducing the amount of tax payable not the amount of the gift.

The amount of the taper relief depends on the length of time by which the deceased survived the transfer. If death occurs within 3 years of the gift, then no tapering applies. From year 3 onwards, the tax charge is reduced by 20% for each complete year after the gift is made.

The levels and bases of taxation and reliefs from taxation can change at any time. The value of any tax relief depends on individual circumstances.

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Family Finances and Intergenerational Wealth Management

Navigating the complexities of wealth preservation and transition.

Your financial plan ensures that your assets are not only protected, but also strategically aligned to safeguard your legacy.

Your adviser will craft meticulous plans that honour your wishes and secure the financial future of your heirs, while helping your family to live their aspirations today, ensuring a seamless transition that minimises tax liabilities and maximises wealth preservation.

WHAT CAN WE DO FOR YOU?

Helping you coordinate all aspects of your financial life – so you can focus on what’s important to you.

  • Through SJP’s panel of private banks, we can provide access to a full private banking service offering, including current accounts, deposit accounts, payment services, trustee and executor accounts and foreign currency accounts.

    Please note that these are referral services, and as such the services provided are separate and distinct to those offered by St. James’s Place.

  • Careful IHT planning is all about passing as much of your estate as possible to who you want to receive it, and reducing the inheritance tax liability payable.

  • In the unfortunate event that something severe happens, protection insurance policies, such as Income Protection and Critical Illness insurance, become crucial.

Discover Our Services
YOUR EXPERTS

Meet your team of experienced wealth advisers who specialise in family planning and intergenerational wealth management solutions.

Meet With An Adviser Meet Your Team
Michael Willgrass
Private Wealth Adviser
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Angelo Crisafulli
Private Wealth Adviser
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Kabir Virk
Private Wealth Adviser
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Richard Thorne
Private Wealth Adviser
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Victoria Trapitsyna
Private Wealth Adviser
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Saneka Francis-Lawrence
Private Wealth Adviser
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Charlie Hannam
Private Wealth Adviser
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Michael Willgrass
Private Wealth Adviser
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Angelo Crisafulli
Private Wealth Adviser
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Kabir Virk
Private Wealth Adviser
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Richard Thorne
Private Wealth Adviser
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Victoria Trapitsyna
Private Wealth Adviser
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Saneka Francis-Lawrence
Private Wealth Adviser
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Charlie Hannam
Private Wealth Adviser
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Tools & Calculators

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Schedule a consultation with one of our experienced advisers to comprehensively assess and map out your specific financial requirements.

This personalised meeting is an opportunity to delve into your unique financial situation, discuss your goals, and develop a tailored strategy that aligns precisely with what you need for achieving your long-term financial aspirations.

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Protection and Insurance

Introduction

Safeguarding your assets is a critical yet frequently neglected aspect of financial planning. To shield yourself and your family from unforeseen life events, like severe illness or premature death, it’s essential to secure protection insurance.

PROTECTION
“1 in 2 people will develop some form of cancer during their lifetime.”

– NHS, Cancer conditions description, 2025

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What types of protection exist?

Life assurance

Delivers a lump sum to your family in the event of death, available in two varieties: term assurance and whole of life assurance. Term assurance offers protection for a designated timeframe, while whole of life assurance ensures a lump sum is paid out at the time of death, provided contributions have been consistently made.

Income protection

Intended to provide an income in the event you are unable to work for an extended period due to illness or injury.

Critical illness

Offers a lump sum payment if you are diagnosed with any of a broad range of predetermined illnesses. These can be set up as either term-based or whole of life policies.

Why do I need protection and insurance?

In the unfortunate event that something severe happens, protection insurance policies, such as Income Protection and Critical Illness insurance, become crucial.

Income Protection is tailored to support financial obligations like mortgage or rent payments, utilities, and other household necessities if you’re incapacitated by illness or injury. This type of insurance typically covers between 50% and 65% of your earnings after a predetermined waiting period (often three to six months) and can continue to pay out as needed.

Critical Illness insurance is structured to provide a lump sum upon the diagnosis of specific severe illnesses or conditions.

We often insure physical items like smartphones and home contents more readily than we do the very income that affords these luxuries. Securing your income, lifestyle, and health holds infinitely more value than insuring tangible items. The repercussions of income loss are far-reaching, particularly for the primary breadwinner of a household, impacting both you and your loved ones significantly.

Though the thought is unpleasant, the stress of financial strain during difficult times is an even heavier burden. The real consideration is not if you should obtain protection insurance but rather if you can manage without it, should you find yourself unable to work. This consideration is particularly pertinent for self-employed individuals who lack the protective measures or benefits that employment might offer.

Determining what expenses are most critical to you and evaluating your priorities over something like protection insurance is key. Ultimately, the essence of protection insurance lies in the peace of mind it offers.

Please note income protection insurance plans do not have a cash-in value and will stop if payments to them cease.

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