Intra-family debts and IHT

The deductibility of debts for inheritance tax (IHT) purposes is a hot topic at the moment, following the changes introduced to IHTA 1984 by this year’s Finance Act.  However, it’s easy to overlook more mundane loans between family members.

Not surprisingly, these loans often remain undocumented as they tend to be informal arrangements.  However, that rarely makes for good IHT planning.

A tip for Lasting Powers of Attorney

Lasting Powers of Attorney should be regarded as central to any family’s wealth planning armoury.  Even non-UK domiciled individuals should make one if they directly own UK assets (something that those de-enveloping UK real estate from offshore structures into direct ownership should be being advised about, but that’s another story).  It is no laughing matter if the owner of the family finances suddenly loses mental capacity to deal with them and the family can no longer access funds to cover its expenses.  Deputyship applications to court still take a very long time.

ATED tax returns

The final version of the tax return for the new Annual Tax on Enveloped Dwellings (ATED) has been published by HMRC.  So, now is the time to start thinking about whether ATED applies to you or your clients.

ATED is only a potential concern if a corporate entity, or a partnership with a corporate member, or a collective investment scheme, owns UK real estate that is used for residential purposes and is worth £2,000,000 or more.  Even then ATED may not apply because there are a number of reliefs for the likes of property developers, property traders and those running a property rental business.