Content
Brave New World
Business Not Pleasure
Summertime Blues
All That Glitters...
Casting The Net
Trust Gordon?
It Ain't Over...
One In The Eye
Keep Your Nose Clean
Foreign Affairs
When Is A Car...
Don't Walk Away
Avoiding, The Issue
Brown Is Anti-PC
VAT's Up Doc?
Fuel's Gold
An Age-old Question?
That's Unfair!
Year In Year Out
How Hard To Try?
It's A Rip-Off!
Outlaws Win
Show Some Restraint
Not Our Problem
They Cannot Be Serious?
Merry-Go-Round
Pension Disappointments
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For years, tax law has drawn a sharp distinction between an "interest in possession" trust (where someone is entitled to the income of the trust fund as it arises) and a "discretionary" trust (where the trustees have more choice about what they do with income). IIP trusts have been more favourably treated for Inheritance Tax. On Budget Day, Mr Brown said that this distinction would be abolished. No warning was given. Although trusts set up in the past would not be affected, changes to existing trusts would bring them within the new rules. What's more, IHT planning often uses trusts which are established in a will: if the person wrote the will in the past but dies now, the new rules will apply. Lawyers and accountants have been furiously (in every sense) lobbying government about many different aspects of the changes, particularly the apparent requirement to end trusts for children when they are 18 (or take a tax hit). At present, you can keep the capital in the trust until the child is 25. There is quite a difference between giving a lot of money to an 18-year old and giving it to a 25-year old. Or perhaps that difference only seems important to the over-40s... After two months of denying that there was any problem, the government made some significant modifications to the proposals at the beginning of June. Still, the dust has not settled on the Finance Bill: when it does, it will be important to review your will. If you don't have a will, it is always useful to rectify that! We will be happy to discuss IHT planning with you. |
© Bayar Hughes & Co., 2010.