Many taxpayers have heard of a ‘seven-year rule’ for inheritance tax (IHT) purposes. It is widely assumed that lifetime gifts escape the IHT net if the donor survives at least seven years after making the gift. Whilst this is generally true, what happens if the donor dies within seven years of making gifts – is […]
The Oxford English dictionary defines a gift as: ‘something, the possession of which is transferred to another without the expectation or receipt of an equivalent’. The gift of an asset is thus not an arm’s length sale in return for market value proceeds, nor a loan or investment – it is entirely unilateral. For capital
Lifetime Gifts in a Nutshell Read More »
As the days start to lengthen and the end of the tax year (5 April) approaches, it is a good time to consider whether any action should be taken to ensure that available tax reliefs and opportunities are maximised. This is a wide subject, but there are some basic steps that can be considered by
It’s That Time Again! Year End Tax Planning Read More »
Inheritance tax (IHT) has been labelled by some as a tax on death. However, IHT has also been referred to as a voluntary tax, as steps can often be taken during an individual’s lifetime to reduce the IHT burden on their death. In addition, forward planning can sometimes reduce capital gains tax (CGT) in advance
A Matter of Life and Death Read More »
Joint bank and building society accounts (e.g., between spouses or civil partners, or family members) can be tricky for inheritance tax (IHT) purposes when one of the joint account holders dies. The main difficulty is in establishing how much of the balance in the account ‘belonged’ to the deceased immediately before death; was it 50%,
Hands Off! Joint Bank Accounts Read More »
As part of succession planning and considering what happens to the family silver, minor children may often be the only successors. The problem is that under English law, minors cannot own property – they cannot own bank accounts, shares of land, property or companies. Someone therefore has to own assets for them and have the
Trusts And Children: Do They Go Together? Read More »
The past few decades have seen a substantial increase in the number of property owners who let one or more houses to tenants, driven in part by relaxations in lending, rising property prices and some tax advantages. At the time of writing (i.e., before the autumn budget on 30 October 2024), the question is whether
Rental Properties: Tax Issues Read More »
When a company has been incorporated, the first thought by the owner is often how one pays oneself. Proper remuneration planning can help mitigate the effects of perceived double taxation of corporation tax for the company and personal tax for the shareholders or directors. Dividends Vs Salary The usual method of extracting profit is to
Profit Extraction: Some Traps to Avoid Read More »
When starting a business, few people will give much thought to its end. However, after some years, even a small ‘oneman band’ business may have built up a valuable customer list with a goodwill value. It is therefore important that a business owner should consider how and when they might wish to retire from, sell
Heading for the Exit? Read More »
Trusts can be a very useful planning tool for inheritance tax (IHT) purposes, as well as family and business succession planning. Tax is only one factor, as preservation of the family silver is another potential advantage of trusts; but they are not necessarily always suitable. What are Trusts? A trust exists broadly when the legal
Trusts: IHT Issues and Benefits Read More »
