A parent with sufficient means may sometimes wish to transfer an income producing asset. For example, mother may wish to transfer investment property in London into a discretionary trust for her daughter (e.g., to help cover university costs or supplement income when buying her own home and/or starting a family). However, there are various tax… Read More »
A family investment company (FIC) is a possible means of passing family wealth down to adult children and remoter generations. Furthermore, a FIC can be a tax-efficient ‘wrapper’ for individuals to manage their wealth. A FIC is simply a company; its shareholders are family members. For example, parents could apply their wealth for the benefit… Read More »
The inheritance tax (IHT) ‘gifts with reservation’ (GWR) provisions are anti-avoidance rules. They are basically designed to prevent ‘cake and eat it’ situations (i.e., giving away an asset in the hope of surviving at least seven years in order for the gift to become exempt from IHT, but continuing to use or enjoy the asset… Read More »
It is said that inheritance tax (IHT) is the UK’s most hated tax. Nevertheless, the transferable nil rate band (TNRB) is a welcome facility for married couples or civil partners (nb references to spouses in this article include civil partners). The TNRB provisions (IHTA 1984, ss 8A-8C) broadly allow claims for all or part of… Read More »
Many parents wish to support family members by gifting them assets, with the aim of providing a source of income, and/or something that will appreciate in value over time. For example, a parent (e.g. mother) may gift a 50% interest in an investment property in London to her adult son. The possible tax implications will… Read More »
The valuation of assets for tax purposes is a tricky business. It has been called a ‘dark art’; a specialist area for experts, not to be dabbled in by other professional advisers. Get help! Even HM Revenue and Customs (HMRC) officers don’t normally engage in tax valuations of assets; they enlist the help of specialists… Read More »
Two (or possibly more) individuals might together buy (say) a house. If one of those individuals disposes of their interest in the house to a third party or dies, how should that property interest be valued for inheritance tax (IHT) purposes? Why it matters The jointly-owned house could be held either as ‘joint tenants’ or… Read More »
Most tax advisers use the guidance manuals published by HM Revenue and Customs (HMRC) on a regular basis. Taxpayers may sometimes refer to them as well. It might be tempting to go straight to the HMRC manuals for guidance on a tax issue, without looking at the relevant tax legislation. This would be a mistake… Read More »