Content
After U, Gordon?
Ups And Downs
Gift Horse
What A Relief!
Second Thoughts?
Last One Out...
Penalty Shoot-Out
Ain't Necessarily So
Going, Going, Gone
Papers In Order?
Death And Taxes
Passing The Buck
Hire Higher
Back Taxes, Taxes Back
Options Open
Extortion?
Sick Note
Cats And Dogs
Old-Fashioned Money
I Thee Endow?
Mother's Rights
Countdown
Nowhere To Hide
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The Chancellor made a useful change to inheritance tax in October when he allowed married couples to benefit from two nil rate bands. That means that a couple can at present leave £624,000 to their children IHT-free. That doesn't help if you aren't married or in a civil partnership. The usual plan is to give money away and try to survive seven years - but that's not ideal, because you may want to keep some security, and you may not have that long to live. An alternative is to invest in something that qualifies for "business property relief", such as shares in an unquoted trading company. If you own BPR assets for just two years, they don't count towards your IHT bill at all. Of course, unquoted shares can be risky - but they might save a great deal of tax. A recent tax case highlighted the plan, but unfortunately in this case it didn't work. A woman had made a loan to an unquoted company - loans don't qualify. So the loan was replaced by share capital, but she died within two years - in fact, within two days. If the shares had been a rights issue, that would still have been all right - but the other shareholders had not subscribed in proportion. It was a last minute plan that didn't work. It's worth reviewing your IHT exposure from time to time and thinking about what you want to do about it - the answer might be "nothing", but at least you won't be leaving decisions to the last minute. We'll be happy to help. |
© Bayar Hughes & Co., 2010.