Inheritance Tax Re-Introduction: 4 effective succession planning tips for HNIs

livemint.com:

The recent news on the re-introduction of inheritance tax has made a lot of people panic. However, it needs to be noted that news like this often circulates every few years.

While there is less probability of the inheritance tax getting re-introduced, experts quoted in this article mentioned that there is great uneasiness among the general public on the disproportionate growth of wealth within the sections of the society.

If this tax is reintroduced, the entire estate such as investments in equities, debt instruments, physical property, art, international assets and even officially counted and declared gold and other precious metals can also come under the purview of the inheritance tax.

However, inheritance tax might be only applicable to families and individuals whose estate value exceeds a certain threshold limit.

In this article, we will look at some ways that families can implement to navigate inheritance tax and proceed with effective succession planning.

Also Read: Should HNIs look at private credit as an investment option? 6 experts answer

One of the best ways to navigate such a scenario would be to set up a trust where the assets are transferred into a trust and the original owner renounces their direct ownership and control over these assets.

“This is akin to a formalised gifting process, where the assets are no longer considered part of the individual's personal wealth. Even though the assets are transferred out of personal ownership, the trust can be structured in a way that the original owner (or their family) can still benefit from these assets as beneficiaries. This provides a balance between losing direct control and continuing to benefit from the asset's value and income. By transferring assets into a