{"id":3247,"date":"2011-04-20T20:58:52","date_gmt":"2011-04-20T20:58:52","guid":{"rendered":"https:\/\/www.financial-fluency.co.uk\/"},"modified":"2019-04-02T17:50:49","modified_gmt":"2019-04-02T16:50:49","slug":"personal-tax-how-to-avoid-inheritance-tax","status":"publish","type":"page","link":"https:\/\/www.financial-fluency.co.uk\/financial-fluency-publications\/tax-publications\/personal-tax-how-to-avoid-inheritance-tax\/","title":{"rendered":"Personal Tax: How to Avoid Inheritance Tax"},"content":{"rendered":"

How to Avoid Inheritance Tax<\/h1>\n

By Carl Bayley BSc ACA<\/p>\n

\"How<\/a><\/p>\n

\"How<\/a>
\n
<\/p>\n

\n\n\n\n
“Useful source of IHT information”<\/em>
\nWhat Investment Magazine<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


<\/p>\n

\n\n\n\n
“Popular tax guides, including How to Avoid Inheritance Tax, which provide comprehensive guidance on tax planning strategies”<\/em>
\nThe Institute of Chartered Accountants<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


<\/p>\n

\n\n\n\n
“Discover how the \u00a3325,000 exemption can be used not just once but every 7 years”<\/em>
\nTax Busting Tip<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


<\/p>\n

\n\n\n\n
“This guide tells you everything you need to know about using trusts to play less inheritance tax”<\/em>
\nTax Busting Tip<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n


<\/p>\n

\n\n\n\n
“How to Avoid Inheritance Tax is full of real-life examples and practical tax planning advice”<\/em>
\nTax Busting Tip<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Contents of How to Avoid Inheritance Tax<\/h2>\n

Chapter 1. Introduction\u00a0<\/strong>
\n1.1 There Are Two Certainties in Life
\n1.2 Guide Overview
\n1.3 A Brief History of Inheritance Tax
\n1.4 Why Worry?
\n1.5 Where Does the Tax Come From?
\n1.6 Married Couples & Civil Partners
\n1.7 Tax Years
\n1.8 Trust Terminology
\n1.9 A Guide to Effective Inheritance Tax Planning
\n1.10 About the Examples<\/p>\n

Chapter 2. Inheritance Tax Principles\u00a0<\/strong>
\n2.1 Transfers of Value
\n2.2 Who Is Liable for Inheritance Tax?
\n2.3 Who Actually Pays the Tax?
\n2.4 Grossing Up
\n2.5 Who Are the Personal Representatives?
\n2.6 Who Pays the Tax on Lifetime Transfers?
\n2.7 Collection of Tax
\n2.8 How Much Tax Is Payable?
\n2.9 What Is Your Estate?
\n2.10 The Basic Calculation on Death
\n2.11 Making the Payment
\n2.12 Interest-Free Loans
\n2.13 Quick Succession Relief<\/p>\n

Chapter 3. The Main Exemptions\u00a0<\/strong>
\n3.1 What Is an Exemption?
\n3.2 The Nil Rate Band
\n3.3 The Spouse Exemption
\n3.4 Gifts to Charities & Other Exempt Bodies
\n3.5 Charitable Legacies
\n3.6 National Heritage Property
\n3.7 Death on Active Service<\/p>\n

Chapter 4. Lifetime Transfers\u00a0<\/strong>
\n4.1 Inheritance Tax on Lifetime Transfers 3
\n4.2 Chargeable Lifetime Transfers
\n4.3 Potentially Exempt Transfers
\n4.4 Problems with PETS
\n4.5 Death within Seven Years of a Lifetime Transfer
\n4.6 Relief for Reduction in Value
\n4.7 Timing of Lifetime Gifts
\n4.8 Evidence
\n4.9 Gifts with Reservation
\n4.10 Why Not Just Give it All Away?<\/p>\n

Chapter 5. Lifetime Exemptions\u00a0<\/strong>
\n5.1 Absolute Exemption
\n5.2 The Annual Exemption
\n5.3 The Small Gifts Exemption
\n5.4 Using the Annual and Small Gifts Exemptions Effectively
\n5.5 Gifts in Consideration of Marriage
\n5.6 Maintenance of Family
\n5.7 Dependent Relatives
\n5.8 Normal Expenditure Out of Income
\n5.9 Transfers Not Intended to Confer Gratuitous Benefit
\n5.10 Transfers Allowable for Income Tax or Conferring Retirement Benefits<\/p>\n

Chapter 6. Inheritance Tax Planning for Married Persons\u00a0<\/strong>
\n6.1 Scope of this Chapter
\n6.2 A Brave New World?
\n6.3 The Transferable Nil Rate Band
\n6.4 Nil Rate Band Transfers in Practice
\n6.5 Remarriage
\n6.6 Separation & Divorce
\n6.7 Inheritance Tax Planning for Married Couples
\n6.8 The Second Time Around
\n6.9 Using the Transferable Nil Rate Band
\n6.10 Estate Equalisation
\n6.11 Will Trusts
\n6.12 The Widow\u2019s Loan Scheme
\n6.13 When and How to Undo Obsolete Planning
\n6.14 The Daughter-In-Law Plan
\n6.15 The Spouse Bridge
\n6.16 The Family Debt Scheme
\n6.17 Grab a Granny
\n6.18 Married Couples with Mixed Domicile<\/p>\n

Chapter 7. The Tax Benefits of Business Property\u00a0<\/strong>
\n7.1 Introduction
\n7.2 When Is Business Property Relief Available?
\n7.3 Just How Useful Is Business Property Relief?
\n7.4 Qualifying Businesses \u2013 Basic Principles
\n7.5 Property Investment or Letting Businesses
\n7.6 Businesses Exploiting Land
\n7.7 What Does \u2018Wholly or Mainly\u2019 Mean in Practice?
\n7.8 Relevant Business Property
\n7.9 What Is the Value of a Business?
\n7.10 Business Property Relief for Shares and Securities
\n7.11 The Minimum Holding Period
\n7.12 Replacement Business Property
\n7.13 Extra Rules for Lifetime Transfers
\n7.14 Lifetime Transfers of Property Chargeable on Death
\n7.15 How to Preserve Business Property Relief
\n7.16 Maximising Business Property Relief
\n7.17 Sheltering Investments with Business Property Relief
\n7.18 Money Box Companies
\n7.19 Changing the Business to Avoid Inheritance Tax
\n7.20 Business Succession Planning
\n7.21 Business Property Relief for Smaller Shareholdings
\n7.22 The AIM Exemption
\n7.23 Agricultural Property Relief
\n7.24 Farmhouses
\n7.25 The Safety Net
\n7.26 The Double Dip
\n7.27 Make Hay While the Sun Shines<\/p>\n

Chapter 8. Inheritance Tax Planning with Trusts\u00a0<\/strong>
\n8.1 What Is a Trust?
\n8.2 Where Do We Stand with Trusts Today?
\n8.3 What Types of Trust Are There?
\n8.4 What Is an Interest in Possession?
\n8.5 Discretionary Trusts
\n8.6 Inheritance Tax Regimes for Trusts: An Overview
\n8.7 Transfers into Trust
\n8.8 The New Trust Hierarchy
\n8.9 Bare Trusts
\n8.10 Bereaved Minors\u2019 Trusts
\n8.11 Pre-22\/3\/2006 Interest in Possession Trusts
\n8.12 Disabled Trusts
\n8.13 Immediate Post-Death Interests
\n8.14 Transitional Serial Interests
\n8.15 18 to 25 Trusts
\n8.16 Relevant Property Trusts
\n8.17 End of Trust Interests within Beneficiary\u2019s Estate
\n8.18 The Relevant Property Regime
\n8.19 Ten-Year Anniversary Charges
\n8.20 Exit Charges
\n8.21 Exit Charges: Special Cases
\n8.22 Death of Settlor
\n8.23 Income Tax and Trusts<\/p>\n

Chapter 9. More Advanced Planning with Trusts\u00a0<\/strong>
\n9.1 The Relevant Property Trust Shelter
\n9.2 Serial Trusts
\n9.3 How Useful Is the Relevant Property Trust Shelter?
\n9.4 How to Avoid Anniversary and Exit Charges
\n9.5 Why Not Just Give Assets to the Beneficiaries?
\n9.6 How to Avoid Inheritance Tax and Capital Gains Tax at the Same Time
\n9.7 Investment Property Trusts
\n9.8 Limitations to Planning with Relevant Property Trusts
\n9.9 Discounted Gift Trusts
\n9.10 Loan Trusts
\n9.11 Excluded Property Trusts
\n9.12 Older Beneficiaries
\n9.13 Pilot Trusts<\/p>\n

Chapter 10. Practical Aspects of Inheritance Tax Planning\u00a0<\/strong>
\n10.1 The Bigger Picture
\n10.2 Commercial Issues
\n10.3 Interaction with Other Taxes
\n10.4 Valuations
\n10.5 Related Property
\n10.6 Jointly Held Property
\n10.7 Valuing Jointly Held Property
\n10.8 Other Jointly Held Assets
\n10.9 Mortgages
\n10.10 Residential Care Fees
\n10.11 Wills and Intestacy
\n10.12 Statutory Rights
\n10.13 Life Insurance
\n10.14 Life Policies Written in Trust
\n10.15 Insuring for Inheritance Tax Liabilities
\n10.16 Pensions
\n10.17 Lottery Syndicates
\n10.18 Minor Problems
\n10.19 Income, Capital and Control
\n10.20 Associated Operations<\/p>\n

Chapter 11. Interaction with Capital Gains Tax<\/strong>
\n11.1 A Quick Capital Gains Tax Update
\n11.2 The Uplift on Death
\n11.3 The Capital Gains Tax vs Inheritance Tax Dilemma
\n11.4 Gifts of Business Assets
\n11.5 Business Property Relief and Entrepreneurs\u2019 Relief
\n11.6 Transfers to Spouses or Civil Partners
\n11.7 Capital Gains Tax and the Family Home
\n11.8 Capital Gains Tax and Gifts with Reservation
\n11.9 Other Assets
\n11.10 Capital Gains Tax and Trusts<\/p>\n

Chapter 12. The Family Home<\/strong>
\n12.1 When Our Main Asset Becomes Our Main Liability
\n12.2 Move Out and Then Give It Away
\n12.3 Sell Up and Give Away the Proceeds
\n12.4 Re-mortgage and Give Away the Proceeds
\n12.5 Re-mortgage and Buy an Annuity
\n12.6 Sell up or Re-mortgage and Invest the Proceeds
\n12.7 Sale at Market Value
\n12.8 The Widow\u2019s Loan Scheme & The Family Home
\n12.9 Leave a Share to the Children
\n12.10 Children Put Their Share into Trust
\n12.11 Leave a Share to a Discretionary Trust
\n12.12 The \u2018Full Consideration\u2019 Method
\n12.13 Co-Ownership
\n12.14 Shearing
\n12.15 The Three-Way Split<\/p>\n

Chapter 13. The Pre-Owned Assets Charge\u00a0<\/strong>
\n13.1 Moving the Goalposts
\n13.2 Exemptions
\n13.3 Opting Out
\n13.4 Implications for Planning with the Family Home
\n13.5 Tax Charges and Domicile<\/p>\n

Chapter 14. Domicile\u00a0<\/strong>
\n14.1 What Is Domicile?
\n14.2 Domicile of Origin
\n14.3 Domicile of Choice
\n14.4 A Guide to Emigration
\n14.5 Shedding a UK Domicile of Dependency
\n14.6 Retaining a Domicile of Origin<\/p>\n

Chapter 15. The Inheritance Tax Planning Timetable\u00a0<\/strong>
\n15.1 It\u2019s Never Too Early to Start
\n15.2 Marriage
\n15.3 Becoming a Parent
\n15.4 Adult Children
\n15.5 Your First Grandchild
\n15.6 Losing a Parent
\n15.7 Still Together
\n15.8 Losing a Spouse
\n15.9 Remarriage
\n15.10 Life Expectancy Over Seven Years
\n15.11 Life Expectancy Three to Seven Years
\n15.12 Life Expectancy Two to Three Years
\n15.13 Loss of Capacity
\n15.14 Deathbed Planning<\/p>\n

Chapter 16. Planning After Death\u00a0<\/strong>
\n16.1 Deeds of Variation
\n16.2 Disclaimers
\n16.3 Transfers Out of Trusts within Two Years of Death
\n16.4 Second Chances
\n16.5 Post-Mortem Relief<\/p>\n

Appendices<\/strong>
\nA. The Nil Rate Band 1914 – 2015
\nB. Double Tax Treaties
\nC. Connected Persons
\nD. Sample Documentation
\nE. National Bodies
\nF. Useful Addresses
\nG. The European Union and The European Economic\u00a0Area
\nH. UK Tax Rates and Allowances<\/p>\n

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How to Avoid Inheritance Tax By Carl Bayley BSc ACA “Useful source of IHT information” What Investment Magazine “Popular tax guides, including How to Avoid Inheritance Tax, which provide comprehensive guidance on tax planning strategies” The Institute of Chartered Accountants “Discover how the \u00a3325,000 exemption can be used not just once but every 7 years” […]<\/p>\n","protected":false},"author":13,"featured_media":0,"parent":1079,"menu_order":0,"comment_status":"closed","ping_status":"open","template":"pagetemplate4.php","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/pages\/3247"}],"collection":[{"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/comments?post=3247"}],"version-history":[{"count":47,"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/pages\/3247\/revisions"}],"predecessor-version":[{"id":16577,"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/pages\/3247\/revisions\/16577"}],"up":[{"embeddable":true,"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/pages\/1079"}],"wp:attachment":[{"href":"https:\/\/www.financial-fluency.co.uk\/wp-json\/wp\/v2\/media?parent=3247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}