Thursday, 19 March 2015

How to save Inheritance Tax on your main residence


Successful Inheritance Tax (IHT) mitigation in respect of the main residence is one of the hardest things to do, as the law currently stands.  However, as many people’s most valuable asset is their bricks and mortar, it is a problem that demands some consideration – even if the answer is to do nothing (yet) or take out life cover written in trust.  But if neither of those appeals, what then?

Thursday, 5 March 2015

Can I take instructions from my client’s attorney?


You have been managing your client’s money for many years when, out of the blue, you are contacted by someone claiming to be your client’s attorney.  The attorney is brandishing a copy English Property and Financial Affairs Lasting Power of Attorney (LPA), certified on every page (as it should be) by the donor (i.e. the giver) of the power.  So far, so reassuring.  But is it safe for you to act on the attorney’s instructions?  Here’s some food for thought.

Thursday, 19 February 2015

EU Trusts Register – update


In my 13 March 2014 blog on ‘Trusts and the EU’s Fourth Anti-Money Laundering Directive’, I highlighted the EU Parliament’s plans to introduce a register of settlors, trustees and beneficiaries of trusts, as set out in the draft of the Fourth Anti-Money Laundering Directive.  The Directive has now been finalised and, whilst it looks as though the register will still go ahead, the number of trusts affected will be reduced and trust information will not be placed on a publicly available register.

Thursday, 5 February 2015

IHT related penalties: a warning for PRs and beneficiaries


The recent case of Hutchings v HMRC [2015] UKFTT 0009 (TC) will be of interest to anyone acting as executor/administrator of an estate and anyone who is a beneficiary.  Like the sword of Damocles, HMRC was dangling a tax penalty of £87,000 over the heads of both the executors and one of the beneficiaries – but which one of them would take the rap?  The Tax Tribunal’s reasoning for their decision is fascinating stuff.

Thursday, 22 January 2015

IHT planning for business owners: business finance


As a general rule, Inheritance Tax (IHT) is payable on the net value of assets.  In other words, debts are generally deductible when calculating what a person is worth for IHT purposes on death.  However, the Finance Act 2013 introduced limitations on the deductibility of certain debts.  Judging from a few cases that have come to my attention recently, business owners still remain blissfully unaware of the impact of these changes on them.  Time for a quick reminder, then. 

Thursday, 18 December 2014

Pilot trusts post the Finance Bill 2015


One of the bigger surprises in this year’s Autumn Statement was the news that the much consulted upon new ‘Settlement Nil Rate Band’ has been dropped. 

One of the reasons for proposing a Settlement Nil Rate Band was to make the use of multiple trusts less attractive for Inheritance Tax (IHT) mitigation purposes.  Each trust would no longer have its own IHT nil rate band to set off against the periodic charges to IHT, such as the ten year anniversary charge and any exit charges, that it may face during its existence.

Now, with the publication of draft clauses for the Finance Bill 2015 last week, we learn that, in certain situations, there remains a future for planning involving multiple trusts after all.

Thursday, 4 December 2014

CGT Principal Residence Relief update


My 24 April 2014 blog reported that buried within the Government’s March 2014 consultation on extending Capital Gains Tax (CGT) to non UK residents was a change to CGT Principal Residence Relief (PRR) affecting UK residents. 

Last week, the Government published its response to the consultation and confirmed that PRR is set to change.  The changes are not as envisaged in the consultation document though.