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Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
Inheritance Tax Presentation
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Inheritance Tax Presentation

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The impact of not taking action to protect the wealth that clients have built up will mean thousands of pounds of tax being paid \'voluntarily\' thereby reducing what can be passed to the next …

The impact of not taking action to protect the wealth that clients have built up will mean thousands of pounds of tax being paid \'voluntarily\' thereby reducing what can be passed to the next generation.

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  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • This presentation aims to recap on the key issues currently facing advisers in the Inheritance Tax marketplace by providing an update to our understanding of the current legislation, planning opportunities and key issues for clients. An alternative to tax planning is simply to pay the tax. Failing to plan means paying the tax. Deciding to do nothing means paying the tax.
  • Transcript

    • 1.
      • Inheritance Tax Update
    • 2.
      • Inheritance Tax
      • The need for IHT planning
      • A quick recap on the main rules
      • Loopholes, scams and dodges
      • Civil Partnership Act 2004
      • Questions
    • 3.
      • The need for IHT Planning
      • 9.4 million people wanting to leave assets to family and friends have not considered IHT planning.
      • Brewin Dolphin’s National Inheritance Survey – March 2005
    • 4.
      • The need for IHT Planning
      • £3.4 billion – projected tax take in 2005/06
      • Average IHT bill this year?
      • National Audit Office Report on IHT – 12/2004
      • Estimated 2.4 million homes in UK valued at over current NRB
      • It’s here to stay!
    • 5.
      • The need for IHT Planning
      • Has been described as “a voluntary tax”, as many exemptions, reliefs and solutions available
      • Taxman relies on people’s reluctance to plan
        • “ mistrust their relatives more than they mistrust the Inland Revenue” syndrome
        • The nature of the subject matter!
    • 6.
      • The need for IHT Planning
      • Inland Revenue is getting tougher
        • “ MPs urge to curb avoidance of inheritance tax” – Financial Times 12 July 2005
        • In 2003/04 3,600 compliance enquiries resulted in additional tax yield of £126 m
        • IRS in USA measure IHT “tax gap”
          • Inland Revenue are drawing on IRS experience
      • Need for Quality Advice is greater than ever
    • 7.
      • A quick recap on the main rules
      • IHT applies to total value of an estate on death (and on certain lifetime gifts)
      • Worldwide assets of UK domiciled individuals
      • Nil Rate Band - £275,000 (2005/06 tax yr)
      • Bigger the estate bigger the tax bill!
      • Spouse Exemption
    • 8.
      • Main Exemptions - Gifting
      • Exempt
        • Annual Exemption - £3,000 pa (c/f)
        • Small Gifts - £250 pa
        • Marriage Gifts
        • – £5k, £2.5k, £1k
        • Normal Expenditure
          • out of income
          • regular payments
          • maintain standard of living
      • Potentially Exempt
        • Gifts to individuals
        • Gifts to certain trusts
    • 9.
      • And now the bad news!
      Inheritance Tax has to be paid before probate is granted
    • 10.
      • Ways to save IHT
      • Effective and likely to remain effective
      • Able to adapt to changing circumstances
      • Tax efficient and affordable Ways to save IHT
    • 11.
      • First step – Make a Will
      • No Will = Laws of Intestacy
      • Will = Your Choice
        • Jointly owned assets
          • Joint tenancy – not included
          • Tenancy-in-common – included
    • 12.
      • Inheritance Tax Planning
      • Tax Efficiency
        • Gift assets in life and on death to the children
      • The Problem
        • Primary concern is naturally for the spouse
      • One Solution
        • Nil Rate Band (NRB) Will trust
    • 13.
      • NRB Will Trust
      • A trust which only comes into effect on death
        • Allows spouse access to the fund
        • Allows children and grandchildren to benefit
      • At the discretion of the trustees
        • Trustees usually include the spouse and adult children
      • Potential saving of £140,000 IHT
    • 14.
      • NRB Will Trust
      • Need Assets to put into trust
        • ISA/PEPs?
        • Deposit Accounts?
        • Unit Trusts/OEICs?
        • Insurance Bonds?
        • The property?
      • Have to be sole ownership or held in Tenancy in Common.
    • 15.
      • A quick word about property
      • Give house to children and pay them a commercial reviewable rent and live for
      • 7 years
    • 16.
      • A quick word about property
      • Tenancy-in-common
        • Half the house left to children on first death
          • Security for spouse
          • Bankruptcy/divorce of children
          • Sons/daughters-in-law
            • Only own half the house and forced sale could mean becoming homeless
    • 17.
      • Maybe a better option
      • Legal Charge Route
        • House held in tenancy-in-common and NRB Will Trust set up without specification of assets.
        • Will Trust has a clause in it which empowers trustees to accept an I.O.U from surviving spouse (i.e.: a charge over the property) rather than cash in satisfaction of the legacy.
        • Personal reps impose a charge in favour of the trustees prior to handing over to surviving spouse.
          • Care needed to avoid Stamp Duty Land Tax and Interest in Possession in whole house
    • 18.
      • Summary of Options
      • Spend it (on frivolous things)
      • Give it away
        • Absolutely or into Trust (Gift Trust)
      • Lend it
        • Loan Trust – all the growth is outside the estate
      • Charities
      • Discounted Gift Schemes
      • Insure it
        • Whole of life to pay IHT – in trust!
      • Nil Rate Band planning

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