How to Save Inheritance Tax: Understand How Inheritance Tax Works - and Pass on More of Your Hard-earned Wealth to Those You Love (How to)

Contents......Page 8
Preface......Page 14
What is the nature of inheritance tax?......Page 16
In what circumstances does a liability to the tax arise and what property incurs liability to the tax?......Page 17
Ascertaining domicile......Page 18
Transfers of value......Page 21
Taxable and non-taxable dispositions......Page 22
Excluded property......Page 24
Which assets incur a liability to tax (unless they are specifically exempted by legislation or are excluded property)?......Page 25
The nil-rate band......Page 27
Valuing gifts and transfers of value......Page 31
How to calculate inheritance tax payable on death......Page 32
Calculating the nil-rate band which is available when making an immediately chargeable lifetime gift......Page 33
Cumulation......Page 37
Corporate bonds, government stocks and other stocks and shares quoted on a recognised stock exchange......Page 38
Unquoted stocks and shares......Page 39
Related property......Page 40
Land, shares, unit trusts and common investment funds sold within a short time of death......Page 41
The rates of tax......Page 43
The meaning of reservation of a benefit......Page 44
The pre-owned assets income tax charge......Page 46
What incurs the charge......Page 47
Exceptions from the charge......Page 48
Jumping out of the pre-owned assets pan into the inheritance tax fire......Page 50
Taper Relief......Page 53
Business Property Relief......Page 54
Agricultural Property Relief......Page 58
Woodland Relief......Page 65
Quick Succession Relief......Page 66
Relief for Heritage assets......Page 67
Relief for land and other assets sold within a short time of death......Page 68
Deeds of Family Arrangement and distributions made from discretionary trusts within two years of death......Page 69
Double taxation relief......Page 70
What is a trust?......Page 71
The nature of an interest in possession trust......Page 72
Relevant property or discretionary trusts, their advantages and uses......Page 73
The nature of a relevant property trust......Page 74
Advantages and uses of discretionary trusts......Page 75
The two-year discretionary will trust......Page 76
An outline of the taxation of relevant property trusts......Page 77
The taxation of interest in possession trusts created before 22 March 2006......Page 83
The taxation of interest in possession trusts which existed on 22 March 2006......Page 86
The taxation of trusts created on or after 22 March 2006......Page 87
Bare trusts, charitable trusts and life policy trusts......Page 90
Bare trusts......Page 91
Trusts for charitable purposes......Page 92
Life policy trusts......Page 94
How capital gains tax works......Page 95
Capital gains tax on a death......Page 96
Capital gains tax and trusts......Page 97
Primary and secondary responsibility for payment of the tax......Page 99
Trust funds and transfers of value......Page 100
Tax on a residuary estate bequeathed to both exempt beneficiaries and taxable beneficiaries......Page 101
Summary......Page 102
When is inheritance tax due?......Page 103
Can inheritance tax be paid by instalments?......Page 104
Calculating inheritance tax – a brief summary......Page 105
Inheritance tax planning in context......Page 107
Saving inheritance tax by making gifts during your life......Page 108
Overcoming reluctance to give and early giving......Page 109
Using non-taxable dispositions, inheritance tax-exempt gifts and excluded property......Page 110
Making non-exempt gifts in excess of the inheritance tax threshold......Page 111
Choosing which assets to give and the beneficiaries......Page 113
Downsizing, equity release schemes, roll-up mortgages and home reversionary schemes......Page 114
Financial risks and dangers of other possible solutions based upon the family home......Page 117
Other possible solutions......Page 119
Non-financial risks and dangers......Page 122
Conclusion......Page 124
Using annuities and trusts of life policies......Page 125
Equalising estates between partners other than spouses and civil partners......Page 126
The difference between a disclaimer and a variation......Page 127
The effect of the deed......Page 129
Using exempt gifts......Page 131
The importance of the nil-rate inheritance tax band......Page 133
The basics of a nil-rate band discretionary will trust scheme......Page 134
Using the family home in a nil-rate band legacy discretionary trust scheme......Page 136
Taxation of nil-rate band discretionary will trusts......Page 141
The advantages of using a nil-rate band discretionary will trust scheme......Page 142
The 2007 Pre-Budget Review proposals......Page 143
How to claim......Page 145
Choosing from the available post 9 October 2007 routes......Page 146
Using a two-year discretionary will trust......Page 149
Using the inheritance tax reliefs......Page 150
The grossing up of legacies......Page 151
The ‘related property’ valuation rules......Page 152
Skipping a generation......Page 153
D......Page 154
L......Page 155
T......Page 156
D......Page 157
I......Page 158
S......Page 160
W......Page 161