Trusts: Tax traps to avoid!
The use of trusts is a fairly popular way of passing wealth down generations. For example, an individual (who is resident and domiciled in the UK) may wish to set up a discretionary trust to hold an investment property, to provide income to family members, and ultimately a capital asset that will hopefully appreciate in […]
IHT: Don’t look back in anger!
Many taxpayers are aware of a ‘seven year rule’ for inheritance tax (IHT) purposes. They assume this rule to mean that if (for example) a parent gifts an investment property to their adult offspring, the gift will escape IHT if the parent survives at least seven years after making the gift. Seven years…or is it? […]
Making Family Trading Company Investments IHT Efficient
Many family and owner-managed trading company owners invest in their businesses through a combination of acquiring shares and making cash loans. The company might use the funds for the same business purpose, but the inheritance tax (IHT) implications of the shares and cash loans will often differ, depending on the availability of business property relief […]
POAT: Out Of The Frying Pan Into The Fire? Part 2
Some possible exceptions to the pre-owned assets income tax charge, as it applies to land and property. The pre-owned assets tax (POAT) is an income tax charge that can be an unexpected and unpleasant surprise for some individuals. Fortunately, the scope of POAT is restricted by a number of excluded transactions and exemptions from the […]
POAT: Out Of The Frying Pan Into The Fire? Part 2
Some possible exceptions to the pre-owned assets income tax charge, as it applies to land and property. The pre-owned assets tax (POAT) is an income tax charge that can be an unexpected and unpleasant surprise for some individuals. Fortunately, the scope of POAT is restricted by a number of excluded transactions and exemptions from the […]
Making Gifts And Legacies: Love Letters
The reason why an individual (e.g. a family member) makes a gift to another is ultimately a matter of fact. However, it will often be necessary to provide evidence in support of the reason for the gift, because the tax treatment might depend on it, particularly if there is more than one possible reason and […]
POAT: Out Of The Frying Pan Into The Fire? Part 1
An overview of the pre-owned assets tax charge as it applies to land and properties. Individuals (and advisers) will sometimes need to consider whether ‘pre-owned assets tax’ (POAT) applies, such as (but not necessarily) if inheritance tax (IHT) planning is undertaken. The POAT rules broadly charge income tax on benefits received by former owners of […]
Inheritance Tax – Whose Money Is It?
A potential inheritance tax pitfall of jointly held money accounts in banks and building societies etc. If a bank or building society account is jointly held by family members (e.g. father and adult daughter) it can cause some difficulties for inheritance tax (IHT) purposes. For example, when one of the joint account holders (say, father) […]
Gifting The Family Home – An IHT Trap
It is not uncommon for individuals to give away their family home. For example, an elderly widow moving into nursing care may be in the fortunate position of being able to make a lifetime gift of her residence to her adult daughter. This article focuses on a potential inheritance tax (IHT) anti-avoidance pitfall in the […]