Wills and estate planning

Making a Will that's right for you

The conflict between lifetime gifts and gifts in Wills, the latest

There is a presumed intention where parents, for example, leave a child a share or sum by Will and then make a significant lifetime gift of a sum to that child. The Court presumes that a parent would not intend to benefit one child twice to the detriment of the other(s). The lifetime gift is regarded as a payment on account of the sum or share in the Will with the result that the legacy reduces to the extent of the lifetime gift.

In order for the presumption to be relied upon, the lifetime gift must be such as ‘to establish the child in life’ or make ‘provision’ for them.

A new Bill for estates without Wills, but the sure-fire solution is an effective Will

The Government has issued a draft Inheritance and Trustees' Powers Bill which will abolish the spouse's life interest trust that is automatically established on a death in intestacy (where there’s no Will or the Will falls short and does not deal with all the assets in the estate) under the existing laws of England and Wales.

Maximising income on let property

If you own a let property jointly with your spouse or registered civil partner, you should assess whether the proportion of income declared in your tax returns could be altered to maximise your respective marginal rates for income tax.

If this is the case then you should, with advice, agree the terms of a declaration of property trust which records the revised interests in the equity in the property and complete and send form 17 to HMRC which will acknowledge that the proportion of the net income arising follows the proportion of the equity declared.

Keeping HMRC Out of Your Wine Cellar

Many people dabble in buying fine wines, usually for personal use in years to come, or perhaps “laying down” for their children or god children. But sometimes they may over - estimate the ability of themselves, family and friends to glug their way through all the bottles in the cellar. If so, they may then sell a few cases, hoping to make a profit and fund the purchase of a few more cases for drinking even further into the future.

Keep it in the family: pension death benefits

We all hope to enjoy the fruits of our labour in retirement having spent our working lives paying into the pension pot.

Few of us take any action to protect our family nest egg from the clutches of the taxman should we pass away prematurely.

This is partly because no-one likes to think they might die before their time or considers the implications this may have for the loved-ones left behind. In addition, most people think their pension plans “belong“ to them. But for tax and estate planning purposes they don’t - they are owned by trustees.

Death-in-Service Nominations

A company death-in-service scheme may provide you with valuable life insurance cover at no cost, or you may have to pay the premium yourself (usually at a cheap group rate), and you may have the option to top-up the cover to meet personal/family needs beyond the minimum provided by the company.

Home Loan ‘Double Trust’ Schemes - double trouble ahead?

In the 1990s a number of Inheritance Tax schemes emerged as property prices soared, designed to allow house owners to give the family home to the children, but carry on living there without offending the ‘gift with reservation’ rules. POAT (pre-owned asset tax) was announced in 2003 to discourage such schemes by imposing a new income tax charge on the value of the benefit from 6 April 2005.

Do you need to sort out your IHT & Succession Planning?

Many of our clients ask a little vaguely about “sorting out Wills/Inheritance Tax”. In some cases this simply means reviewing an existing Will or making a new one. However, more often than not the exercise turns out to include reviewing life policies and pension plans, and Inheritance Tax (IHT) planning as well. In fact trying to make a Will without integrating life policy and pension death benefits, and understanding the IHT implications, can lead to some unfortunate tax consequences.

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