In April the think tank Resolution Foundation published a report stating that Inheritance Tax is “unfit for modern society” and should be abolished. This is not the first suggestion for IHT to be overhauled but they do go further with suggestions as to how it should be amended, providing further facts and figures as to the reasons why.
If you are in a relationship and are not married then if a partner dies the survivor would not receive any automatic provision from the deceased’s estate.
I often work in conjunction with my colleagues in our commercial team, particularly for business owners who are thinking about their own Wills and Inheritance Tax planning. The most frequent area in which my colleagues and I work together relates to the preparation of cross option agreements.
In the current climate you may wonder why it is still appropriate to consider preparing a trust. In recent times the compliance associated with trusts has become even more burdensome.
Many of my clients have business interests, which need to be considered at the time of preparing a Will. Such interests may be in the form of a shareholding in a private family company, or an interest in a partnership, or acting as a sole trader. The type of business structure will have an impact on how the Will might be drafted and what, if any, administrative provisions should also be included.
The Office of Tax Simplification has provided details of the scope of its review for the current Inheritance Tax system, and whether and how, it might be simplified. They have advised that this will include both administrative and technical questions, which will include:
The area of private client law does not often go through a period of prolonged change. However, as I reflect upon the year it seems that 2017 has seen a number of development and proposals affecting our day to day work.
If you are in the fortunate position to own valuable antiques, works of art, sculptures or other valuable personal possessions, it may be possible to consider using such items for your Inheritance Tax planning strategies.
Letters of Wishes are not a legally binding document. They are not part of a Will, nor a Trust Deed, and they have no legal status when prepared. However, such letters, sometimes known as side letters, do help to exert a sense of moral obligation on those left behind to help administer the estate, or trust.
When individuals are looking at preparing Wills they should discuss such matters with their family. Whilst a Will is, of course, a private document if one is prepared to discuss the issues with the family that will be left behind after their own demise, it can be hugely helpful in maintaining harmonious family relationships.
The preparation of Wills is governed by many pieces of legislation, but the primary statute is the Wills Act 1837, which still details the principal requirements for preparing a valid Will. Time has moved on significantly over the course of the last 180 years and whilst other Acts of Parliament, such as the Trustee Act 1925 and Trustee Act 2000, have updated parts of the legislation, there are many principles that endure from 1837. The Law Commission has began a consultation on significant reforms to this.
In light of figures released by HMRC recently on the amount of Inheritance tax being paid, I am sure more people could do more to avoid or reduce their tax bill. In the 2016/17 tax year the amount of Inheritance Tax (IHT) paid to HMRC exceeded £5 Billion for the first time. Information published by HMRC shows the increasing amount of revenue received for, what many consider, to be one of the most unfair taxes payable.
In this final blog in my series about “How to Save Inheritance Tax” we look at how to save IHT through making use of exemptions.
This is the fourth blog that I have written on the subject of how to save Inheritance Tax. In the first blog I explained that everybody has a Nil-Rate Band allowance of £325,000. Many of you will be aware that in April 2017 the Residence Nil-Rate Band Allowance was introduced.
So far in this series of blogs on Inheritance Tax I have talked about gifts being made, and making use of the annual allowance, small gifts exemption, gifts in contemplation of marriage or potentially exempt transfers. The common factor linking all of these types of gifts is that they are gifts of capital.
This is the second blog in my series about how you might be able to save Inheritance Tax.
This is the first in the series of blogs about some of the ways in which it is possible to save Inheritance Tax on your estate.
This week is Mental Health Awareness Week and in recent days there have been numerous reports, articles and news items on the subject. Footballer Aaron Lennon has been detained under the Mental Health Act, whilst cricketer Andrew Flintoff has talked about the word “stigma” not being used when discussing mental health issues.
Intellectual property rights can easily be forgotten about when preparing Wills. However, if you are an author, musician, artist or have any other protected rights, then you will need to consider this at the time of preparing a Will.
As everybody returns to work and children start back at school, a sense of normality is descending upon us. The fun of a festive season is enjoyable whilst it lasts but it is important to look ahead to the forthcoming year, whether that is for you as an individual, or whether it is your business that you are planning ahead for.
If you are a beneficiary of a Trust you may wonder what your rights to information and documentation may be. A distinction may need to be drawn between the type of trust originally created, in particular whether you, as a beneficiary, have a fixed right, often the case with a life interest trust, or whether you are a potential beneficiary of a Discretionary Trust.
A woman who claims her mother was suffering from dementia and having hallucinations when she signed her final Will has lost her case in the High Court. While the judge admitted the facts showed that Doris Harris had begun suffering from dementia in May 2004, there was no indication she was unable to understand the Will she signed less than a year later.
It is a common misconception that it is not necessary for a Will to be prepared because, in the case of a couple, everything will pass to the survivor. Whilst this may, in part, be true this is not necessarily always going to be the case.
High profile figures are calling upon the Government to scrap the UK’s inheritance tax system, following recent revelations that David Cameron’s late mother ‘gifted’ the Prime Minister £200,000 five years ago.
As we approach the Budget, which is due to take place next month, speculation will no doubt amount over what, if any, changes might be made to the Inheritance Tax regime. Whilst one can only speculate prior to the Budget I thought it might be interesting to consider the projected impact of Inheritance Tax, assuming no changes are made.
At the time of completing your Will, the intention is that it will cover the scenario of how your estate should be distributed in the event of your death shortly thereafter. There may be provisions included to provide some longevity to the Will, in order that it need not be updated constantly. However, it should still be reviewed from time to time, at least every 5-10 years, although that does not mean it needs to be changed that often.