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The Guide to Inheritance Tax

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Free Guide to Inheritance Tax

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The Guide to Inheritance Tax

  1. 1. Wealth IFA News Wealth IFA News Valiant Financial Consultants Limited Kieron Robertson BA Hons Cert PFS Valiant Financial Consultants Limited Kieron Robertson BAAdviser Cert PFS Estate Planner & Independent Financial Hons Estate Planner & Independent Financial Adviser A Guide to Inheritance Tax Planning Preserving and Passing your wealth Kieron Robertson BA Hons Cert PFS Estate Planner & Independent Financial AdviserKieron Robertson BA Hons Cert Tunbridge Wells, Kent TN1 1XP Pantiles Chambers, High Street, PFSEstate Planner &675 Mob: 07711 329 256 Fax: 07092 252 390 Web: www.wealthifa.com Tel: 01892 570 Independent Financial AdviserPantiles Chambers, High Street, Tunbridge Wells, Kent TN1 1XP Valiant Financial Consultants Limited is authorised and regulated by the Financial Services Authority.Tel: 01892 570 675 Mob: 07711 329 256 Fax:House, 12 Knoll Rise, Orpington, Kent BR6 0PG. The FSA Do Not Regulate Tax Advice. Registered in England number 3766442. Registered O ce Valiant 07092 252 390 Web: www.wealthifa.com
  2. 2. Protecting wealth02 A Guide to Inheritance Tax - 2009/2010
  3. 3. Welcome A Guide to Inheritance Tax Planning Welcome to our guide to Inheritance Tax, dedicated to helping you mitigate the potential effects of Inheritance Tax on your estate, whether you are considering the use of family trusts or alternative solutions. Your wealth might encompass businesses, property and investments in the UK and abroad that require specialist considerations. Helping you protect your wealth is an important part of what we do, and one thing is certain, you need to plan to protect your wealth from a potential Inheritance Tax liability. Benjamin Franklin once said that ‘nothing is certain but death and taxes’, and thanks to Inheritance Tax, they’re not only certain, they’re intrinsically linked. Once only the domain of the very wealthy, the wide-scale increase in home ownership and rising property values over the past decade have pushed many estates over the Inheritance Tax threshold. Inheritance Tax applies to your entire worldwide estate, including your property, savings, car, furniture and personal effects. You should also consider all of your investments, pensions and life insurance policies and ensure that life polices are held in an appropriate trust so they do not add to the value of your estate. Inheritance Tax as we know it today was introduced in 1986. The current rate of Inheritance Tax for everyone is charged at 40 per cent, and is paid by those who inherit. It is deducted from your estate on death, so Inheritance Tax is relevant whether you stand to gain an inheritance or plan to leave one. If you would like to discuss the options available to you for protecting your legacy, please contact us for further information. We can help you with the many aspects of Inheritance Tax Planning, from advice on wills and trusts to other tax-efficient ways to ensure your wealth is best structured for your beneficiaries.A Guide to Inheritance Tax - 2009/2010 03
  4. 4. 2126 08 19 14 13To obtain further information,please contact us.04 A Guide to Inheritance Tax - 2009/2010
  5. 5. 2526 Contents... Dispelling the myth about Inheritance Tax Protecting wealth from a potential liability. 06 Minimising an Inheritance Tax liability Passing assets to beneficiaries using a trust. 17 08 Transferring wealth between your spouse or civil partner New rules could mean up to double the Inheritance Tax allowance is available. Important exemptions Legally passing on your estate without it being subject to 20 Inheritance Tax. Inheritance Tax matters Leaving your assets. 09 A gift with reservation 22 10 Making sure the gift is not a gift for Legal documents Inheritance Tax purposes. 23 Applying for probate. Arranging to pay Making a will Will your estate be shared out exactly as you want it to be? 11 Inheritance Tax Who will handle your affairs? Valuing an estate Accurately reflecting what those assets 12 Protecting your wealth Making the most of different 24 would receive in the open market. solutions. Financial reasons to make a will Putting it off could mean that 14 Inheritance Tax glossary Common estate planning terms. 26 your spouse receives less. Alternative Investment Market shares Reducing an Inheritance Tax liability 16 on an estate.A Guide to Inheritance Tax - 2009/2010 05
  6. 6. Inheritance Tax Guide – What it meansDispellingthe myth aboutInheritance TaxProtecting wealth from a potential liabilityInheritance Tax is the tax that is paid on your ‘estate’, chargeable at a currentrate of 40 per cent. Broadly speaking, this is a tax on everything you own at thetime of your death, less what you owe. It’s also sometimes payable on assets youmay have given away during your lifetime. Assets include property, possessions,money and investments. One thing is certain, careful planning is required toprotect your wealth from a potential Inheritance Tax liability.06 A Guide to Inheritance Tax - 2009/2010
  7. 7. Inheritance Tax Guide – What it meansNot everyone pays Inheritance also subject to an immediate introduced some transitional 22 March 2006, or whichTax on their death. It only Inheritance Tax charge on values rules for trusts set up before replaced a pre-March 2006 IIPapplies if the taxable value of that exceed the Inheritance Tax this date. Trusts not affected by up to 5 October 2008, continueyour estate (including your share nil rate band. Tax is also payable the new rules (and so where no to benefit from the old rules untilof any jointly owned assets and ten-yearly on the value of trust Inheritance Tax is immediately they come to an end. All otherassets held in some types of assets above the nil rate band; payable on any transfers, but newly created IIP trusts willtrusts) when you die is above however certain trusts are with regard to transfers made come under the new rules.£325,000 (2009/10 tax year). exempt from these rules. during someone’s lifetime mayIt is only payable on the excess be payable if the individual dies If you die within seven years ofabove this nil rate band. In order to work out whether within seven years) are: making a transfer into a trust the current Inheritance Tax nil on which you have already paidThere are also a number of rate band of £325,000 (tax year n lifetime transfers into a trust 20 per cent Inheritance Tax, theexemptions which allow you to 2009/10) has been exceeded for a disabled person tax due is recalculated using thepass on amounts (during your Inheritance Tax rate applicablelifetime or in your will) without on death (currently 40 perany Inheritance Tax being due, cent). Tax will be payable byfor example: Inheritance Tax is the tax that is paid your estate to HM Revenue & on your ‘estate,’ chargeable at a Customs on the difference.n if your estate passes to your husband, wife or civil current rate of 40 per cent. Broadly If you made a transfer on which partner and you are both domiciled in the UK there is speaking this is a tax on everything no Inheritance Tax was due at the time, its value is added to no Inheritance Tax to pay, you own at the time of your death, your estate when working out even if the estate is above the £325,000 nil rate band less what you owe. any Inheritance Tax that might be due.n most gifts made more than Trusts that count as ‘relevant seven years before your death on a transfer, you need to take property trusts’ must also pay: are exempt into account all ‘chargeable’ n trusts created on death for a (non-exempt, including disabled person n a ‘periodic’ tax charge of upn certain other gifts, such potentially exempt) gifts and to 6 per cent on the value as wedding gifts and transfers made in the previous n trusts created on death for a of trust assets over the gifts in anticipation of a seven years. If a transfer takes minor child of the deceased in Inheritance Tax nil rate band civil partnership up to you over the nil rate band, which the child will become fully once every ten years £5,000 (depending on the Inheritance Tax is payable at entitled to the assets at age 18 relationship between the 20 per cent on the excess. n an ‘exit’ charge proportionate giver and the recipient), n trusts set up under a will to the periodic charge gifts to charity and £3,000 Where the transfer was made for someone who is not a when funds valued above given away each year are after 5 April and before disabled person or minor the Inheritance Tax nil also exempt 1 October in any year, the tax child of the deceased who rate band are taken out of is payable on 30 April in the becomes entitled to their a trust between ten yearTransfers of assets into most following year. Where the benefit on the death of the anniversariestrusts and companies will transfer was made after person who wrote the willbecome subject to an immediate 30 September and before These rules don’t apply toInheritance Tax charge if they 6 April in any year, it is payable Existing accumulation and trusts which are exempt fromexceed the Inheritance Tax nil six months after the end of the maintenance trusts had until 6 April the new rules.rate band (taking into account month in which the transfer 2008 to change (where appropriate)the previous seven years’ was made. the trust’s rules to enable them tochargeable gifts and transfers). fall outside the new rules. NeeD MORe On 22 March 2006, the INFORMATION?In addition, transfers of money government changed some of Interest in possession (IIP) PLEASE CONTACT US WITH YOUR ENQUIRY.or property into most trusts are the rules regarding trusts and trusts that existed beforeA Guide to Inheritance Tax - 2009/2010 07
  8. 8. Transferring assetsTransferringwealth betweenyour spouse orcivil partner NeeD MORe INFORMATION? PLEASE CONTACT USNew rules could mean up to double the WITH YOUR ENQUIRY.Inheritance Tax allowance is availableNew rules mean that the survivor of a survivor, the benefit of the nil rate bandmarriage or civil partnership can benefit to pass on assets to other members of thefrom up to double the Inheritance Tax Where one party to a family, normally the children, tax free isallowance (£650,000 for 2009/10 tax not used.year, increasing to £700,000 by 2010/11), marriage or civil partnershipin addition to the entitlement to the full dies and does not use their Where one party to a marriage or civilspouse relief. nil rate band to make tax-free partnership dies and does not use their bequests to other members of nil rate band to make tax-free bequests toInheritance Tax is only paid if the taxable other members of the family, the unusedvalue of your estate when you die is over the family, the unused amount amount can be transferred and used by the£325,000 (2009/10 tax year). The first can be transferred and used survivor’s estate on their death. This only£325,000 of a person’s estate is known as by the survivor’s estate on applies where the survivor died on or afterthe Inheritance Tax nil rate band because their death. 9 October 2007.the rate of Inheritance Tax charged on thisamount is currently set at zero per cent, so In effect, spouses and civil partners nowit is free of tax. have a nil rate band that is worth up to from Inheritance Tax. This can mean that double the amount of the nil rate band thatWhere assets are transferred between if, on the death of the first spouse or civil applies on the survivor’s death.spouses or civil partners, they are exempt partner, they leave all their assets to the08 A Guide to Inheritance Tax - 2009/2010
  9. 9. Exempt beneficiaryInheritanceTax mattersLeaving your assetsIf you leave everything to your husband, wife or civilpartner, in this instance there usually won’t be anyInheritance Tax to pay because a husband, wife or civilpartner counts as an ‘exempt beneficiary’. But bear inmind that their estate will be worth more when theydie, so more Inheritance Tax may have to be paid then.However, if you are domiciled (have a trust to start once the estate isyour permanent home) in the UK finalised. You can also use a trustwhen you die but your spouse or to look after assets you want tocivil partner isn’t, you can only pass on to beneficiaries who can’tleave them £55,000 tax-free. immediately manage their own affairs (either because of their ageOther beneficiaries or a disability).You can leave up to £325,000 tax-free to anyone in your will, not just You can use different types of familyyour spouse or civil partner (tax year trust depending on what you want2009/10). So you could, for example, to do and the circumstances. If yougive some of your estate to someone are planning to set up a trust youelse or a family trust. Inheritance Tax should receive specialist advice. If youis then payable at 40 per cent on any expect the trust to be liable to tax onamount you leave above this. income or gains you need to inform HM Revenue & Customs Trusts as soonUK Charities as the trust is set up. For most typesInheritance Tax isn’t payable on of trust, there will be an immediateany money or assets you leave to Inheritance Tax charge if the transfera registered UK charity – these takes you above the Inheritancetransfers are exempt. Tax threshold. There will also be Inheritance Tax charges when assetsWills, trusts and financial leave the trust.planningAs well as making a will, you canuse a family trust to pass on your NeeD MOReassets in the way you want to. You INFORMATION?can provide in your will for specific PLEASE CONTACT USassets to pass into a trust or for WITH YOUR ENQUIRY.A Guide to Inheritance Tax - 2009/2010 09
  10. 10. Getting legal Legal documents Applying for probate If you are an executor of someone’s will, you may need a legal document called a ‘grant of probate’ to enable you to sort out the deceased person’s affairs. If there is no will, a close relative can apply for a ‘grant of letters of administration’. In Scotland different procedures apply for a death. If there is more than one executor If you apply for probate without it’s common to agree that one will a solicitor, the forms you need to apply for the grant and sort out the complete depend on where the will. However, up to four executors person lived and whether or not can apply jointly and sort out you expect Inheritance Tax to be everything together. due on the estate. Inheritance Tax is only paid in a small number of You can ask a solicitor to apply cases, when the taxable value of for the grant for you. There the deceased person’s estate (after NeeD MORe may be a charge to provide this exemptions) is over the £325,000 INFORMATION? service, so it’s a good idea to threshold (applies for deaths in the PLEASE CONTACT US WITH YOUR ENQUIRY. check first. 2009/10 tax year).10 A Guide to Inheritance Tax - 2009/2010
  11. 11. IntestacyMaking a willWill your estate be shared out exactly as you want it to be?Planning your finances in advance should n you can decide how your assets are An executor is the person responsible forhelp you to ensure that when you die shared – if you don’t have a will, the law passing on your estate. You can appoint aneverything you own goes where you want it says who gets what executor by naming them in your will. Theto. Making a will is the first step in ensuring n if you’re an unmarried couple (whether or courts can also appoint other people to bethat your estate is shared out exactly as you not it’s a same-sex relationship), you can responsible for doing this job.want it to be. make sure your partner is provided for n if you’re divorced, you can decide whether Once you’ve made your will, it is important toIf you don’t make a will, there are rules for to leave anything to your former partner keep it in a safe place and tell your executor,sharing out your estate called the Law of n you can make sure you don’t pay more close friend or relative where it is.Intestacy, which could mean your money Inheritance Tax than necessarygoing to family members who may not need It is advisable to review your will every fiveit, or your unmarried partner or a partner Before you write your will, it’s a good idea to years and after any major change in yourwith whom you are not in a civil partnership think about what you want included in it. You life, such as getting separated, married orreceiving nothing at all. should consider: divorced, having a child or moving house. Any change must be by ‘codicil’ (an addition,If you leave everything to your spouse or n how much money and what property and amendment or supplement to a will) or bycivil partner there’ll be no Inheritance Tax to possessions you have making a new will.pay because they are classed as an exempt n who you want to benefit from your willbeneficiary. Or you may decide to use your n who should look after any children under Scottish law on inheritance differs fromtax-free allowance to give some of your 18 years of age English law.estate to someone else or to a family trust. n who is going to sort out your estate and carry out your wishes after your death – inA will sets out who is to benefit from your other words, your executorproperty and possessions (your estate) afteryour death. There are many goodreasons to make a will: NeeD MORe INFORMATION? PLEASE CONTACT US WITH YOUR ENQUIRY.A Guide to Inheritance Tax - 2009/2010 11
  12. 12. Protecting wealthValuing an estateAccurately reflecting what those assets would receive in the open market Valuing the deceased person’s estate is one of The value of all the assets, less the deductible debts,When valuing a the first things you need to do as the personal gives you the estate value. The threshold above whichdeceased person’s representative. You won’t normally be able to take the value of estates is taxed at 40 per cent is £325,000estate, you need over management of their estate (called ‘applying for the 2009/10 tax year.to include assets for probate’ or sometimes ‘applying for a grant of(property, possessions representation/ confirmation’) until all or some of If you don’t know the exact amount or value of anyand money) they any Inheritance Tax that is due has been paid. item, such as an Income Tax refund or householdowned at their death bill, you can use an estimated figure. But ratherand certain assets But bear in mind that Inheritance Tax is only payable than guessing at a value, try to work out an estimatethey gave away during on values above £325,000 for the 2009/10 tax year. based on the information available to you. You’ll findthe seven years instructions about how to show estimates on thebefore they died. The valuation process form you complete.The valuation mustaccurately reflect what This initially involves taking the value of all the assets The forms on which you’ll need to record the valuationthose assets would owned by the deceased person, together with the will differ, depending on the expected valuation amount.reasonably receive in value of: You complete a form IHT205 for estates where you don’tthe open market at the expect to have to pay Inheritance Tax (called ‘excepteddate of death. n their share of any assets that they own jointly with estates’) and a form IHT400 where you do expect to have someone else – for example, a house that they own to pay. The forms vary for excepted estates in Scotland. with their partner n any assets that are held in a trust, from which they You should be able to value some of the estate assets had the right to benefit quite easily, for example, money in bank accounts n any assets which they had given away, but in which or stocks and shares. In other instances, you may they kept an interest – for instance, if they gave a need the help of a professional valuer (or chartered house to their children but still lived in it rent-free surveyor for valuing a property). If you do decide to n certain assets that they gave away within the last employ a valuer, make sure you ask them to give you seven years the ‘open market value’ of the asset. This represents the realistic selling price of an asset, not an insurance Next, from the total value above, deduct everything that value or replacement value. the deceased person owed, for example: If the affairs of the estate are complicated, you may want n any outstanding mortgages or other loans to work with a solicitor to help you value the estate and n unpaid bills pay any tax due. If you’re not using a solicitor you can ask n funeral expenses HM Revenue & Customs to use form IHT400 to work outNeeD MORe any Inheritance Tax due.INFORMATION? (If the debts exceed the value of the assets owned by thePLEASE CONTACT US person who has died, the difference cannot be set against Once you’ve completed the relevant tax forms, you alsoWITH YOUR ENQUIRY. the value of trust property included in the estate.) need to complete the relevant probate form.12 A Guide to Inheritance Tax - 2009/2010
  13. 13. Protecting wealth Paying Inheritance Tax - forms you need to complete Country in which the Required forms if Inheritance Tax Required forms if you expect deceased person lived is unlikely to be due (‘excepted estates’) Inheritance Tax to be due England or Wales Probate application form PA1 Probate application form PA1 Inheritance Tax form IHT205 Inheritance Tax form IHT400 Form IHT421 ‘Probate summary’ Scotland Form C1 (‘Inventory’) and form C5 if they Form C1 (‘Inventory’) died on or after 6 April 2004; otherwise Inheritance Tax form IHT400 form C1 only Northern Ireland Inheritance Tax Form IHT205 only Inheritance Tax form IHT400 Form IHT421 ‘Probate summary’A Guide to Inheritance Tax - 2009/2010 13
  14. 14. IntestacyFinancial reasonsto make a willPutting it off could mean that your spouse receives lessIt’s easy to put off making a will. But if you die without one, your assets may bedistributed according to the law rather than your wishes. This could mean that yourspouse receives less, or that the money goes to family members who may not need it.There are lots of good financial reasons for If you and your spouse or civil partner Planning to give your homemaking a will: own your home as ‘joint tenants’, then away to your children while the surviving spouse or civil partner you’re still aliven you can decide how your assets are automatically inherits all of the property. You also need to bear in mind, if you are shared out - if you don’t make a will, the If you are ‘tenants in common’ you each own a planning to give your home away to your law says who gets what proportion (normally half) of the property and children while you’re still alive, that:n if you aren’t married or in a civil can pass that half on as you want. n gifts to your children, unlike gifts to your partnership (whether or not it’s a same spouse or civil partner, aren’t exempt sex relationship) your partner will not A solicitor will be able to help you should you from Inheritance Tax unless you live for inherit automatically, so you can make want to change the way you own your property. seven years after making them sure your partner is provided forn if you’re divorced or if your civil partnership has been dissolved you can decide whether to leave anything to an ex-partner who is living with someone elsen you can make sure you don’t pay more Inheritance Tax than necessary14 A Guide to Inheritance Tax - 2009/2010
  15. 15. Intestacyn if you keep living in your home n personal items, such as If you are partners but children if they died while the without paying a full market household articles and aren’t married or in a deceased was still alive) rent (which your children pay cars, but nothing used for civil partnership n to the Crown if there are none tax on) it’s not an ‘outright gift’ business purposes If you aren’t married or registered of the above but a ‘ gift with reservation’, n £400,000 (£200,000) free civil partners, you won’t so it’s still treated as part of of tax – or the whole estate automatically get a share of your It’ll take longer to sort out your estate, and so liable for if it was less than £400,000 partner’s estate if they die without your affairs if you don’t have Inheritance Tax (£200,000) making a will. a will. This could mean extran following a change of rules n half of the rest of the estate distress for your relatives and on 6 April 2005, you may If they haven’t provided for you dependants until they can draw be liable to pay an Income The other half of the rest of the in some other way, your only money from your estate. Tax charge on the ‘benefit’ estate will be shared by the option is to make a claim under you get from having free or following: the Inheritance (Provision for If you feel that you have not low cost use of property you Family and Dependants) Act received reasonable financial formerly owned (or provided n surviving parents 1975. provision from the estate, you the funds to purchase) n if there are no surviving may be able to make a claimn once you have given your parents, any brothers and If there is no surviving under the Inheritance (Provision home away, your children sisters (who shared the same spouse/civil partner for Family and Dependants) own it and it becomes part two parents as the deceased) The estate is distributed as Act 1975, applicable in England of their assets. So if they are will get a share (or their follows: and Wales. To make a claim you bankrupted or divorced, your children if they died while the must have a particular type of home may have to be sold to deceased was still alive) n to surviving children in equal relationship with the deceased, pay creditors or to fund part n if the deceased has none of shares (or to their children if such as child, spouse, civil of a divorce settlement the above, the husband, wife they died while the deceased partner, dependant or cohabitee.n if your children sell your or registered civil partner will was still alive) home, and it is not their main get everything n if there are no children, to Bear in mind that if you were home, they will have to pay parents (equally, if both alive) living with the deceased as a Capital Gains Tax on any If you’re married or in n if there are no surviving partner but weren’t married increase in its value a civil partnership and parents, to brothers and or in a civil partnership, you’ll there were children sisters (who shared the same need to show that you’ve beenIf you don’t have a will there are Your husband, wife or civil partner two parents as the deceased), ‘maintained either wholly orrules for deciding who inherits won’t automatically get everything, or to their children if they partly by the deceased’. Thisyour assets, depending on your although they will receive: died while the deceased was can be difficult to prove if you’vepersonal circumstances. The still alive both contributed to your lifefollowing rules are for deaths on n personal items, such as n if there are no brothers or together. You need to make aor after 1 July 2009 in England household articles and cars, sisters then to half brothers claim within six months of theand Wales; the law differs if you but nothing used for business or sisters (or to their children date of the Grant of Letters ofdie intestate (without a will) in purposes if they died while the Administration.Scotland or Northern Ireland. n £250,000 (£125,000) free of deceased was still alive)The rates that applied before tax, or the whole of the estate n if none of the above then tothat date are shown in brackets. if it was less than £250,000 grandparents (equally if more (£125,000) than one)If you’re married or n a life interest in half of the rest n if there are no grandparentsin a civil partnership of the estate (on his or her death to aunts and uncles (or theirand there are no children this will pass to the children) children if they died while the NeeD MOReThe husband, wife or civil partner deceased was still alive) INFORMATION?won’t automatically get everything, The rest of the estate will be n if none of the above, then to PLEASE CONTACT US WITH YOUR ENQUIRY.although they will receive: shared by the children. half uncles or aunts (or theirA Guide to Inheritance Tax - 2009/2010 15
  16. 16. Tax-efficiencyAlternativeInvestmentMarket sharesReducing an Inheritance Tax liability on an estateInvesting in Alternative Not all AIM companies are eligible or land, are excluded. Also, it shares within six months to retainInvestment Market (AIM) shares for Business Property Relief must not be listed on another the Business Property Reliefis one way of reducing an however. To qualify, a company recognised stock exchange. If a exemption.Inheritance Tax liability on an must be a trading company company qualified for Inheritanceestate. Qualifying AIM shares carrying out the majority of its Tax relief when the shares were Investing in the AIM will suitoffer more Inheritance Tax relief financially secure peoplethan some other assets and with other liquid capital whoqualify as ‘business property can invest widely enough toinvestments’. If property is Investing in the AIM will suit bear the risks involved. AIMheld as AIM shares in certaintrading companies, for a period financially secure people with other shares can be unpredictable and invest in smaller, lessof at least two years, it becomes liquid capital who can invest widely established companies witheligible for Inheritance Tax fewer investors than otherBusiness Property Relief at enough to bear the risks involved. stock markets, so share prices100 per cent and will fall out of can be volatile, rising or fallingthe estate for Inheritance Tax rapidly. You should alwayspurposes. This relief is a relief by business in the UK. Businesses bought, but was subsequently receive professional advicevalue – the shares are treated as trading in land or securities, or disqualified under these criteria, before considering this option tohaving no value for Inheritance receiving a substantial amount investors must reinvest their mitigate a potential InheritanceTax purposes. of income from letting property holdings into new qualifying Tax liability. 16 A Guide to Inheritance Tax - 2009/2010
  17. 17. UK trustsMinimising anInheritance Tax liabilityPassing assets to beneficiaries using a trustYou may decide to use a trust to pass assets to beneficiaries, particularly those whoaren’t immediately able to look after their own affairs. If you do use a trust to givesomething away, this removes it from your estate provided you don’t use it or get anybenefit from it. But bear in mind that gifts into trust may be liable to Inheritance Tax.Trusts offer a means of holding n to pass on money or property trust. The trust deed may name (PET) until the child reachesand managing money or while you’re still alive the beneficiaries individually age 18, (the age of majority inproperty for people who may n under the terms of a will or define a class of beneficiary, England and Wales), when thenot be ready or able to manage n when someone dies without such as the settlor’s family. child can legally demand his orit for themselves. Used in leaving a will (England and her share of the trust fund fromconjunction with a will, they Wales only) Trust property the trustees.can also help ensure that This is the property (or ‘capital’)your assets are passed on in What is a trust? that is put into the trust by All income arising within aaccordance with your wishes A trust is an obligation binding the settlor. It can be anything, bare trust in excess of £100after you die. Here we take a a person called a trustee including: per annum will be treatedlook at the main types of UK to deal with property in a as belonging to the parentsfamily trust. particular way for the benefit of n land or buildings (assuming that the gift was one or more ‘beneficiaries’. n investments made by the parents). ButWhen writing a will, there n money providing the settlor survivesare several kinds of trust Settlor n antiques or other seven years from the date ofthat can be used to help The settlor creates the trust valuable property placing the assets in the trust,minimise an Inheritance Tax and puts property into it at the the assets can pass Inheritanceliability. On 22 March 2006 the start, often adding more later. The main types of Tax free to a child at age 18.government changed some of The settlor says in the trust private UK trustthe rules regarding trusts and deed how the trust’s property Life interest or interestintroduced some transitional and income should be used. Bare trust in possession trustrules for trusts set up before In a bare trust the property is In an interest in possessionthis date. Trustee held in the trustee’s name but trust the beneficiary has a legal Trustees are the ‘legal owners’ the beneficiary can take actual right to all the trust’s incomeA trust might be created in of the trust property and must possession of both the income (after tax and expenses), butvarious circumstances, for deal with it in the way set out and trust property whenever not to the property of the trust.example: in the trust deed. They also they want. The beneficiaries are administer the trust. There can named and cannot be changed. These trusts are typically used ton when someone is too young be one or more trustees. leave income arising from a trust to handle their affairs You can gift assets to a child to a second surviving spousen when someone can’t handle Beneficiary via a bare trust while you are for the rest of their life. On their their affairs because they’re This is anyone who benefits alive, which will be treated as death, the trust property reverts incapacitated from the property held in the a Potentially Exempt Transfer to other beneficiaries, (knownA Guide to Inheritance Tax - 2009/2010 17
  18. 18. UK trustsas the remaindermen), who are gifts put into the trust within children during the age of be used without affectingoften the children from the first seven years of its creation. minority. Any income that isn’t entitlement to state benefits;marriage. spent is added to the trust however, strict rules apply. There is also an exit charge property, all of which laterYou can, for example, set up an on any distribution of trust passes to the children. Tax on incomeinterest in possession trust in assets between each ten-year from UK trustsyour will. You might then leave the anniversary. In England and Wales the Trusts are taxed as entitiesincome from the trust property to beneficiaries become entitled in their own right. Theyour spouse for life and the trust Discretionary trust to the trust property when they beneficiaries pay tax separatelyproperty itself to your children The trustees of a discretionary reach the age of 18. At that point on income they receive fromwhen your spouse dies. trust decide how much income the trust turns into an ‘interest in the trust at their usual tax or capital, if any, to pay to possession’ trust. The position is rates, after allowances.With a life interest trust, the each of the beneficiaries but different in Scotland, as, once atrustees often have a ‘power none has an automatic right beneficiary reaches the age of 16, Taxation of propertyof appointment’, which means to either. The trust can have they could require the trustees to settled on truststhey can appoint capital to the a widely defined class of hand over the trust property. How a particular type of trustbeneficiaries (who can be from beneficiaries, typically the is charged to tax will dependwithin a widely defined class, settlor’s extended family. Accumulation and maintenance upon the nature of that trustsuch as the settlor’s extended trusts that were already and how it falls within thefamily) when they see fit. Discretionary trusts are a established before 22 March taxing legislation. For example, useful way to pass on property 2006, and where the child is a charge to Inheritance Tax mayWhere an interest in while the settlor is still alive not entitled to access the trust arise when putting propertypossession trust was in and allows the settlor to keep property until an age up to 25, into some trusts, and onexistence before 22 March some control over it through could be liable to an Inheritance other chargeable occasions2006, the underlying capital the terms of the trust deed. Tax charge of up to 4.2 per cent – for instance, when furtheris treated as belonging to the of the value of the trust assets. property is added to the trust,beneficiary or beneficiaries for Discretionary trusts are on distributions of capital fromInheritance Tax purposes, for often used to gift assets to It has not been possible to the trust or on the ten-yearlyexample, it has to be included grandchildren, as the flexible create accumulation and anniversary of the trust.as part of their estate. nature of these trusts allows maintenance trusts trust since the settlor to wait and see how 22 March 2006 for InheritanceTransfers into interest in they turn out before making Tax purposes. Instead, theypossession trusts after 22 March outright gifts. are taxed for Inheritance Tax as2006 are taxable as follows: discretionary trusts. Discretionary trusts also allow Trusts are veryn 20 per cent tax payable based for changes in circumstances, Mixed trust on the amount gifted into the such as divorce, re-marriage A mixed trust may come about complicated, and trust at the outset, which is and the arrival of children when one beneficiary of an you may have to pay in excess of the prevailing nil and stepchildren after the accumulation and maintenance Inheritance Tax and/ rate band establishment of the trust. trust reaches 18 and others are or Capital Gains Taxn Ten years after the trust still minors. Part of the trust was created, and on each When any discretionary trust then becomes an interest in when putting property subsequent ten-year is wound up, an exit charge possession trust. into the trust. If anniversary, a periodic is payable of up to 6 per cent you want to create charge, currently 6 per cent, of the value of the remaining Trusts for a trust you should is applied to the portion of assets in the trust, subject to vulnerable persons the trust assets that is in the reliefs for business and These are special trusts, seek professional excess of the prevailing nil agricultural property. often discretionary trusts, advice. rate band. arranged for a beneficiaryn The value of the available Accumulation and who is mentally or physically ‘nil rate band’ on each ten- maintenance trust disabled. They do not suffer NeeD MORe year anniversary may be An accumulation and from the Inheritance Tax INFORMATION? reduced, for instance, by the maintenance trust is used to rules applicable to standard PLEASE CONTACT US WITH YOUR ENQUIRY. initial amount of any new provide money to look after discretionary trusts and can18 A Guide to Inheritance Tax - 2009/2010
  19. 19. UK trustsA Guide to Inheritance Tax - 2009/2010 19
  20. 20. ExemptionsImportantexemptionsLegally passing your estate without it being subject to Inheritance TaxThere are some Exempt beneficiaries n Wedding gifts/civil giving to the same person. Inimportant You can give things away to partnership ceremony gifts other words, you can’t combine certain people and organisations a ‘small gifts exemption’ withexemptions without having to pay any Wedding or civil partnership a ‘wedding/civil partnershipthat allow you Inheritance Tax. These gifts, ceremony gifts (to either of ceremony gift exemption’ and which are exempt whether you the couple) are exempt from give one of your children £5,250to legally pass make them during your lifetime Inheritance Tax up to certain when they get married or form ayour estate or in your will, include gifts to: amounts: civil partnership.on to others, n your husband, wife or civil n parents can each give £5,000 Annual exemptionboth before partner, even if you’re n grandparents and other You can give away £3,000 inand after your legally separated (but not if relatives can each give £2,500 each tax year without paying you’ve divorced or the civil n anyone else can give £1,000 Inheritance Tax. You can carrydeath, without it partnership has dissolved), forward all or any part of thebeing subject to as long as you both have a You have to make the gift on or £3,000 exemption you don’t use permanent home in the UK shortly before the date of the to the next year but no further.Inheritance Tax. n UK charities wedding or civil partnership This means you could give away n some national institutions, ceremony. If it is called off and up to £6,000 in any one year including national museums, you still make the gift, this if you hadn’t used any of your universities and the exemption won’t apply. exemption from the year before. National Trust n UK political parties Small gifts You can’t use your ‘annual You can make small gifts, up to exemption’ and your ‘small gifts But, bear in mind that gifts to the value of £250, to as many exemption’ together to give your unmarried partner or a people as you like in any one tax someone £3,250. But you can partner with whom you’ve not year (6 April to the following use your ‘ annual exemption’ formed a civil partnership aren’t 5 April) without them being with any other exemption, exempt. liable for Inheritance Tax. such as the ‘ wedding/civil partnership ceremony gift Exempt gifts But you can’t give a larger sum exemption’. So, if one of your Some gifts are exempt from – £500, for example – and claim children marries or forms a civil Inheritance Tax because of the exemption for the first £250. partnership you can give them type of gift or the reason for And you can’t use this exemption £5,000 under the ‘wedding/ making it. These include: with any other exemption when civil partnership gift exemption’20 A Guide to Inheritance Tax - 2009/2010
  21. 21. Exemptionsand £3,000 under the ‘annual the gifts are regular and that A PeT is only free of Inheritance as a ‘gift with reservation ofexemption’, a total of £8,000. you have enough income to Tax if you live for seven years benefit’), it will still count as cover them and your usual after you make the gift. part of your estate, no matterGifts that are part day-to-day expenditure how long you live after makingof your normal without having to draw on Gifts that count as a PeT are it. For example, if you giveexpenditure your capital. gifts that you, as an individual, your house to your childrenAny gifts you make out of make to: and carry on living thereyour after-tax income (but not Maintenance gifts without paying them a fullyour capital) are exempt from You can also make Inheritance n another individual commercial rent, the value ofInheritance Tax if they’re part Tax-free maintenance n a trust for someone who is your house will still be liableof your regular expenditure. payments to: disabled for Inheritance Tax. n a bereaved minor’s trustThis includes: n your husband or wife where, as the beneficiary In some circumstances a gift n your ex-spouse or former of an Interest In Possession with strings attached might given monthly or other regular civil partner (IIP) trust (with an rise to an Income Tax charge on payments to someone, n relatives who are immediate entitlement the donor based on the value including gifts for dependent on you because following the death of the of the benefit they retain. In Christmas, birthdays or of old age or infirmity person who set up the this case the donor can choose wedding/civil partnership n your children (including trust), you decide to give whether to pay the Income Tax anniversaries adopted children and step- up the right to receive or have the gift treated as a giftn regular premiums on a life children) who are under anything from that trust or with reservation. insurance policy (for you or 18 or in full-time education that right comes to an end someone else) for any other reason during Potentially exempt your lifetimeIt’s a good idea to keep a transfersrecord of your after-tax income If you, as an individual, make Only ‘outright gifts’ NeeD MOReand your normal expenditure, a gift and it isn’t covered by count as PETs INFORMATION?including gifts you make an exemption, it is known as a If you make a gift with strings PLEASE CONTACT USregularly. This will show that ‘potentially exempt transfer’ (PeT). attached (technically known WITH YOUR ENQUIRY.A Guide to Inheritance Tax - 2009/2010 21
  22. 22. GiftingA gift with reservationMaking sure the gift is not a gift for Inheritance Tax purposesA gift with reservation is a gift that is not fully given away. Wheregifts with reservation were made on or after 18 March 1986, you can The value of a giftinclude the assets as part of your estate but there is no seven year for Inheritance Taxlimit as there is for outright gifts. A gift may begin as a gift with is the amount ofreservation but some time later the reservation may cease. the loss to your estate. If you makeIn order for a gift to be effective for first pay the rent. The gift then at the time the rent stops or ceases a cash gift, the lossexemption from Inheritance Tax, becomes an outright gift at that to be market rent. is the same valuethe person receiving the gift must point and the seven year periodget the full benefit of the gift to runs from the date the reservation The value of a gift for Inheritance as the gift. But thisthe total exclusion of the donor. ceased. Or a gift may start as an Tax is the amount of the loss to is not the case withOtherwise, the gift is not a gift for outright gift and then become a your estate. If you make a cash all gifts.Inheritance Tax purposes. gift with reservation. gift, the loss is the same value as the gift. But this is not the caseFor example, if you give your Alternatively, if you give your house with all gifts.house to your child but continue to your child and continue to liveto live there rent free, that would there but pay full market rent, therebe a gift with reservation. If, after is no reservation. If over time you NeeD MORetwo years, you start to pay a stop paying rent or the rent does INFORMATION?market rent for living in the house, not increase, so it is no longer PLEASE CONTACT USthe reservation ceases when you market rent, a reservation will occur WITH YOUR ENQUIRY.22 A Guide to Inheritance Tax - 2009/2010
  23. 23. Protecting wealthArranging to payInheritance TaxWho will handle your affairs?The ‘personal representative’ (the person representative, in which case they are In most cases, Inheritance Tax must benominated to handle the affairs of the known as the ‘administrator’. paid within six months from the end ofdeceased person) arranges to pay any the month in which the death occurs,Inheritance Tax that is due. You usually If you have been nominated as someone’s otherwise interest is charged on thenominate the personal representative in personal representative you have to value amount owing. Tax on some assets,your will (you can nominate more than all of the assets that the deceased person including land and buildings, can beone), in which case they are known as owned. This valuation must accurately reflect deferred and paid in instalments over tenthe ‘executor’. If you die without leaving what the assets would reasonably fetch in years.a will a court can nominate the personal the open market at the date of death.Forms you need to complete In most cases, Inheritance Tax must be paid within six months from the end of the If the estate is unlikely to be subject to Inheritance Tax (an ‘excepted estate’) month in which the death Country in which the Required forms for excepted estates occurs, otherwise interest is deceased person lived charged on the amount owing. England Form IHT205 and form PA1 - application for probate Scotland Form C1 (‘Inventory’) and form C5 if they died on or after 6 April 2004; if they died before this date form C1 only Northern Ireland Form IH205 only If the estate is likely to be subject to Inheritance Tax In this case you complete form IHT400 plus any relevant supplementary forms (these are indicated on the IHT400). You also complete: n form IHT421 ‘Probate summary’ if the deceased person lived in England, Wales or Northern Ireland NeeD MORe n probate application form PA1 if the deceased lived in England or Wales INFORMATION? n form C1 Inventory if the deceased lived in Scotland PLEASE CONTACT US (In Northern Ireland you only complete a probate application form at interview.) WITH YOUR ENQUIRY.A Guide to Inheritance Tax - 2009/2010 23
  24. 24. Solutions Protecting your wealth Making the most of different solutions Decreasing term assurance Such policies should be written in is occupied with agricultural land Decreasing term assurance can an appropriate trust, so that the or pasture and the occupation is be arranged to cover a potential proceeds fall outside your estate. ancillary to that of the agricultural Inheritance Tax liability and land or pasture; and also includes used as a Gift Inter Vivos policy. Business and such cottages, farm buildings and This is a type of decreasing term agricultural property farmhouses, together with the plan that actually reduces at Business and agricultural property land occupied with them as are the same rate as the chargeable are exempt from Inheritance Tax. of a character appropriate to the Inheritance Tax on an estate as property’. Where death occurred a result of a Potentially Exempt Business Property relief: To after 10 March 1992, relief is Transfer (PET). qualify, the property must be given by reducing the value of the ‘relevant business property’ and property by 100 per cent (certain For example, if you gift part of must have been owned by the conditions apply). Prior to that your estate away before death, transferor for the period of two date the relief was 50 per cent. then that part is classed as a PET, years immediately preceding meaning that for a period of seven death. Where death occurred after Woodlands relief years there could be tax due on 10 March 1992, relief is given by There is a specific relief for transfers the transfer. This amount of tax reducing the value of the asset of woodland on death. However, this reduces by a set amount each year by 100 per cent. Prior to 10 March has become less important since the for seven years. 1992, the relief was 50 per cent. introduction of 100 per cent relief for businesses that qualify as relevant The Gift Inter Vivos plan is Agricultural Property relief: business property. designed to follow that reduction Agricultural property is defined to ensure sufficient money is as ‘agricultural land or pasture Where an estate includes woodlands available to meet the bill if the and includes woodland and any forming part of a business, business person who gifted the estate buildings used in connection with relief may be available if the ordinary dies before the end of the seven- the intensive rearing of livestock conditions for that relief are satisfied. year period. or fish if the woodland or building When a woodland in the United24 A Guide to Inheritance Tax - 2009/2010
  25. 25. Solutions Inheritance Tax facts n 1 in 40 people in the UK inherit an average of £17,500 each year. The total after tax is £31bn. n The average estate leaves £90,000 net of tax and the average amount received by each individual is £17,500. This suggests that, on average, people share out their bequests among five people. Some 10 per cent of beneficiaries receive £50,000 or more. AKingdom is transferred on death, the The Pre-Owned Assets Tax further 30 per cent receive £10,000 or more,person who would be liable for the tax Pre-Owned Assets Tax (POAT), which enough to make a down-payment on a home orcan elect to have the value of the timber came into effect on 6 April 2005, pay off a sizeable amount of a mortgage.– that is, the trees and underwood (but clamped down on arrangements n The amount raised from Inheritance Tax duringnot the underlying land) – excluded whereby parents gifted property to the 2006/07 tax year was £3.6bn.from the deceased’s estate. children or other family members n An estimate for the 2007/08 tax year for the while continuing to live in the property level of revenue raised from Inheritance Tax is without paying a full market rent. expected to be £4.1bn. There is a specific relief n The individual threshold from the current POAT is charged at up to 40 per cent on £325,000 (2009/10 tax year) is set to increase for transfers of woodland the benefit to an individual continuing by 7 per cent to £350,000 in 2010/11. on death. However, this to live in a property that they have n It is possible to pass the unused proportion of gifted but are not paying a full rent, and a nil-rate band to your spouse or civil partner has become less important where the arrangement is not caught by for use in the future. since the introduction the Gift with Reservation rules. Sources: HM Revenue & Customs of 100 per cent relief for So anyone who has effected such a & International Longevity Centre UK 2008 businesses that qualify as scheme since March 1986 could fall within relevant business property. the POAT net and be liable to an income tax charge of up to 40 per cent of the annual market rental value of the property. Inheritance tax nilIf the timber is later disposed of, itsvalue at the time will be subject to Alternatively, you can elect by rate band and ratesInheritance Tax. Relief is available if: 31 January following the end of the tax Inheritance Tax is charged at the following year in which the benefit first arises that rate on death:n an election is made within two years the property remains in your estate. of the death, though the Board of HM Inheritance Tax 2009/10 tax year Revenue & Customs have discretion Rental valuations of the property must to accept late elections, and be carried out every five years by an Taxable value of your £325,000n the deceased was the beneficial independent valuer. estate above which it owner of the woodlands for at least is charged five years immediately before death NeeD MORe or became beneficially entitled to it INFORMATION? Rate at which it is 40 per cent by gift or inheritance. PLEASE CONTACT US charged WITH YOUR ENQUIRY.A Guide to Inheritance Tax - 2009/2010 25
  26. 26. GlossaryInheritance Tax glossaryCommon estate planning termsAdministration Bequests and Legacies Registry – for example, if you Deed of VariationDealing with the affairs and Bequests and legacies are have entered a caveat you will A document that can vary theestate of a person who has died, names for gifts left in a will. be warned before any Grant of division of a person’s estateincluding collecting their assets, Representation is issued. after they have died, either bypaying their debts and paying Business changing their will retrospectivelythe residue to the people who Property Relief Chattels or altering the persons entitledare to benefit. Relief from Inheritance Tax for Assets of a person other than on an intestacy (where there is no businesses; a minimum ownership land – for example, jewellery, will or the beneficiaries no longerAffidavit period applies and the business or ornaments, clothes, cars, exist). This must be done withinA document giving evidence interest in the business must fulfil animals, furniture and so on. two years of the person’s death.which is sworn in front of a the conditions.solicitor or other person who can Charity Discretionary Trustsadminister oaths. Capital Gains Tax A charity is an organisation that A trust where the trustees can This is tax which may be payable has as its aim purposes which choose which beneficiaries (ifAgricultural Property on a disposal (for example when are exclusively ‘charitable’ (as any) should receive income and/Relief (APR) you sell an asset) if you make recognised by law), such as the or capital.Relief from Inheritance Tax a chargeable gain. Usually you relief of poverty or promotingfor the agricultural value of have made a gain if the asset education. Charities can be Domicilesome farms and farmhouses is worth more at disposal than structured in a variety of ways – for Your domicile will affect(the value if the land and it was when you acquired it. example, as a company with a whether you pay Inheritancebuildings could only be used A disposal is not only a sale board of directors or as a trust fund Tax on particular assets and canfor agricultural purposes for moneys worth. You will with a board of trustees. Charities affect how much Inheritanceand not the open market only pay Capital Gains Tax on must be for the public benefit. Tax you pay. Domicile is not thevalue). Various conditions capital monies (monies that you Most charities must register same as residence.apply, including a minimum received) that do not form part with the Charities Commission.ownership period. of your income. The tax applies Charities are strictly regulated. Estate not to the value of the asset but All the property and assets ofBeneficiary to the increase in value. Codicil the person who has died.A person or organisation who An addition to a will which maywill receive assets from the Caveat change, modify, delete, extend Executorestate of the deceased. A notice entered at the Probate or add to a will. This is the personal26 A Guide to Inheritance Tax - 2009/2010
  27. 27. Glossaryrepresentative (see below) who of one of the co-owners, the act on behalf of their principal. previous wills. There are formalhas been appointed by the will other takes their share by Power of Attorney may be an requirements for revocation of aor codicil. survivorship. For example, ordinary General Power or it may will as there are for making a will. if you and your spouse own be a Lasting Power of Attorney.Guardian your home as joint tenants it Statutory LegacyA guardian will have parental will automatically pass to the Lasting Power of If a person dies intestateresponsibility for any child surviving spouse when one of Attorney with a spouse or civil partner,(under 18) of whom they are you dies. Your share of your A Lasting Power of Attorney the statutory legacy is thenamed guardian. Parental house will not be part of your can relate to your property and amount of the deceased’sresponsibility means legal estate as it passes automatically. affairs or your personal welfare, estate that their spouse orauthority to act in relation to i.e. decisions about your medical civil partner will receive. Aa child on such matters as Letters of treatment. In order to make a common misconception is thatmedical care, where they are Administration Lasting Power of Attorney you the spouse or civil partner willto live, their education and A grant of representation where must have mental capacity to do automatically receive all of thewhat surname they should be there is no valid will, or there is a so, which must be certified by a estate of the person who hasknown by. Guardians may be will but no executor appointed. certificate provider. An ordinary died intestate, but this is notappointed by a parent who General Power of Attorney will necessarily the case if therehas parental responsibility, an Life Tenant come to an end if you lose your are surviving children and it isexisting guardian or the Court. This is a person who is entitled mental capacity but a Lasting therefore desirable to make aIf you name a guardian in your to benefit from a trust during Power of Attorney will not. will to ensure that your spousewill, the appointment may not their lifetime. They cannot have or civil partner inherits all thattake effect if your child has a the capital in the trust fund; they Probate (Grant of ) you intend them to take.surviving parent with parental are entitled only to the income The ‘Proving’ of a will by sendingresponsibility. or enjoyment of the property. For it to the Probate Registry. Testator/Testatrix example, if the trust fund was a The person making a will (maleInheritance Tax house, the beneficiary would be Residue or female).A tax on the value of a person’s entitled to live there. The remainder of the estate ofestate on their death and also on the person who has died after all A Trustthe value of certain gifts made Personal Representative their debts have been paid and A legal relationship in which oneby an individual during their The person who is dealing with any specific gifts they made under or more persons hold propertylifetime. You may be subject the administration of the estate their will have also been paid. for the benefit of others (theto Inheritance Tax on all your of the person who has died. beneficiaries). A trustee is theassets everywhere in the world Revocation (of will) person who is acting in the trustif you are domiciled in England Potentially Exempt This is the process by which and holds the property for the& Wales. Inheritance Tax also Transfer (PET) someone cancels or takes benefit of someone else.applies to most types of trusts This is an outright gift by an back a will (or codicil) madeand may be charged when individual to another individual previously when they no A Willassets are added to or leave or certain types of trusts. If longer intend that will to take The formal document known asthe trusts and on the ten-yearly the giver (donor) survives effect. The Testator (person a ‘testamentary disposition’ byanniversaries of the trust’s the gift by seven years it will who made a will or codicil) which somebody confirms theircreation. become completely exempt must have mental capacity to wishes as to the division of their from Inheritance Tax, and will revoke the will (or codicil). The estate on death.Intestate/Intestacy be outside the donor’s estate effect of revocation is that anyThe rules that govern where a for the purposes of calculating earlier will is resurrected andperson’s estate is to pass and Inheritance Tax. will take effect as if the laterwho can deal with the estate in cancelled will does not exist. Ifthe absence of a will. Power of Attorney there is no previous will then NeeD MORe This is a formal document giving the person revoking their will INFORMATION?Joint Tenancy legal authority from one person becomes intestate. Most new PLEASE CONTACT USA way of co-owning land and (the donor) to another (the wills contain an explicit clause WITH YOUR ENQUIRYother property. On the death attorney) so that the Attorney may stating that they revoke anyA Guide to Inheritance Tax - 2009/2010 27
  28. 28. Content of the articles featured in this Inheritance Tax Guide is for your general information and use only and is not intended to address your particularrequirements. They should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice. Although endeavours have beenmade to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it willcontinue to be accurate in the future. No individual or company should act upon such information without receiving appropriate professional adviceafter a thorough examination of their particular situation. We cannot accept responsibility for any loss as a result of acts or omissions taken in respectof any articles. Thresholds, percentage rates and tax legislation may change in subsequent Finance Acts. © Goldmine Publishing Limited, 2009. Articles are copyright protected. Unauthorised duplication is strictly forbidden. Goldmine Publishing, Prudence Place, Proctor Way, Luton, Bedfordshire, LU2 9PE.

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