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View the related checklists about Inheritance tax

GAAR guidance: examples of non-abusive transactions—checklist

GAAR guidance: examples of non-abusive transactions—checklist The GAAR guidance aims to help interpret and apply the general anti-abuse rule (GAAR). This is why the GAAR guidance includes in Part D various examples to illustrate the types of arrangements HMRC considers should escape the GAAR and those which it considers should be caught by the GAAR. The current version of the GAAR guidance, as well as previous versions of the guidance, are available online (see: GAAR guidance). Part D of the GAAR guidance (which is dated 11 September 2020) contains the majority of the illustrative examples, but some are found in other parts of the guidance too. For ease of reference, the table in this Checklist: • pulls together • in one place • a list of the arrangements: ◦ referred to in any part of the GAAR guidance ◦ in respect of which HMRC has indicated it would not pursue counteraction under the GAAR (although note that much of the legislation underlying the examples has changed since the examples were...

Checklist for establishing an EBT

Checklist for establishing an EBT FORTHCOMING CHANGE: On 11 March 2024, HM Treasury launched a consultation on the effectiveness of the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, SI 2017/692, which place requirements onto a range of businesses to identify and prevent money laundering and terrorist financing. The consultation includes reforming registration requirements for the Trust Registration Service (TRS)—with a possible de minimis exemption from registration on the TRS if certain tests are met. Responses to the consultation were sought by 9 June 2024 and the government’s response is awaited. See Open consultation: Improving the effectiveness of the Money Laundering Regulations and Share Incentives weekly highlights—14 March 2024—Employee Benefit Trusts. This is a checklist of the main items that must be considered before setting up an employee benefit trust (EBT) and immediately following the establishment of the EBT. It assumes that the company has already made the decision to set up the EBT, having taken appropriate advice on this. For further...

View the related flowcharts about Inheritance tax

Excluded property from 6 April 2017—flowcharts

Excluded property from 6 April 2017—flowcharts These flowcharts are designed to help determine if an asset is excluded property for the purposes of UK inheritance tax (IHT) on or after 6 April 2017. The flowcharts consider whether an asset is excluded property or not, depending on the situs of the property and the domicile of the beneficial owner or settlor as appropriate. However, the detailed provisions relating to excluded property should be referred to and practitioners should also consider whether a double tax treaty may apply to override the excluded property regime depending on the particular circumstances of a matter. See Practice Note: Double taxation relief—summary. Conversely, unilateral relief from IHT may apply where a tax of a similar nature has already been levied in respect of the same asset by a foreign tax authority. For further information, see Practice Notes: Excluded property trusts—key events affecting IHT status and Situs of assets for succession and IHT. Situs of property The situs of an asset is important for determining the...

View the related practice notes about Inheritance tax

Apportionment of IHT burden on death

The calculation and apportionment of inheritance tax (IHT) due on death can be complex, especially taking account of trust interests, chargeable lifetime transfers, the potential mix of exempt and non-exempt beneficiaries, available reliefs, the basic nil rate band (NRB) and the residence nil rate band (RNRB). For further information on calculating IHT on death, see Practice Note: Calculating the inheritance tax (IHT) charge on death, which also contains links to further resources.While HMRC is concerned only with ascertaining and collecting the correct total amount of IHT (and interest) payable following an individual’s death, the beneficiaries of the individual’s estate will want to be sure that the IHT burden has been correctly allocated and that their legacy has benefited from all relevant reliefs and exemptions in the correct proportions. The correct allocation of IHT is the responsibility of the personal representatives (PRs).Calculating the estate rate of IHTOnce the total IHT on the estate is calculated, it is usually necessary to work out how much IHT is attributable to each legacy and...

Calculating the IHT charge on death

This Practice Note outlines how to calculate the amount of inheritance tax (IHT) that arises on an individual’s estate on death. For a broader explanation of the IHT charge on death, see Practice Note: IHT—the charge on death. For a worked example of an IHT calculation on death, see Practice Note: Case study—IHT calculation on death.IHT charge on deathThe IHT charge on an individual’s death falls under two headings:•the 'additional charge'—which can arise on chargeable lifetime transfers (CLTs) and potentially exempt transfers (PET) made by the deceased in the seven years before death, and•the 'estate charge'—which arises on the value of all the property the deceased owned (or was deemed to own) immediately before deathAdditional charge on deathAdditional IHT may be due on the death of the transferor on CLTs that have already suffered IHT at the lower lifetime rates.Where the deceased has not survived seven years from the date of a PET, the failed PET is treated as a chargeable transfer and IHT arises for the first time.The IHT...

View the related precedents about Inheritance tax

Creating a discretionary trust in your lifetime—client guide

Creating a discretionary trust in your lifetime—client guide This document provides general guidance regarding creating a lifetime discretionary trust. It does not cover the tax consequences in any detail. Your specialist Private Client practitioner will be able to provide tailored advice based on the circumstances of your case. What is a trust? A trust is created when assets are transferred to trustees (who may be individuals or a trust corporation) to hold and look after for the benefit of specified individuals, known as the beneficiaries. The parties are: • the settlor — the person who transfers the assets to the trustees • the trustees — the persons (or trust company) who receive the assets from the settlor with obligations to look after the trust assets for the benefit of the beneficiaries • the beneficiaries — the persons who have the benefit of the trust There are different types of trusts. Three main types of trusts are: • bare trusts — commonly used to hold assets for minors until they...

Estate administration—Letter to lender requesting loan facility release

Estate administration—Letter to lender requesting loan facility release [enter name of lender] [enter address of lender] Dear [enter organisation name] The late [enter name of deceased] We refer to our previous correspondence in respect of the estate of the late [enter name of deceased]. We have now

View the related q&as about Inheritance tax

A solicitor obtained a limited grant of letters of administration pending the deceased’s eldest child attaining 18 years. The ‘child’ is now 18 years old and wishes to apply for a cessate grant. What inheritance tax form should the solicitor send to the probate registry with the oath?

A solicitor obtained a limited grant of letters of administration pending the deceased’s eldest child attaining 18 years. The ‘child’ is now 18 years old and wishes to apply for a cessate grant. What inheritance tax form should the solicitor send to the probate registry with the oath? This Q&A considers a situation where an intestate left two minor children. As such it would seem, in the absence of anyone of higher degree, they were entitled to take out letters of administration to the estate. In those circumstances, we assume that the grant was obtained by someone with parental responsibility (see Commentary: 62 Oath for administration by persons with parental responsibility pursuant to a residence order or child arrangements order for minor children jointly entitled to the whole of the estate: Encyclopaedia of Forms and Precedents [1609]) lasting until one of the children reaches 18 years of age. It is not clear whether the estate when the Grant was obtained was such that it required an...

Where a life tenant makes a potentially exempt transfer by surrendering the life interest to the remaindermen on the basis of an actuarial valuation and then dies within seven years; is any resulting inheritance tax liability the responsibility of the life tenant's executors or the trustees?

Where a life tenant makes a potentially exempt transfer by surrendering the life interest to the remaindermen on the basis of an actuarial valuation and then dies within seven years; is any resulting inheritance tax liability the responsibility of the life tenant's executors or the trustees? The underlying premise in respect of life interest trusts and inheritance tax (IHT) is that the life tenant is deemed to own the trust assets for IHT purposes. However, should the life tenant as beneficiary dispose of their interest in possession (and here we are assuming that the life interest in this scenario is a qualifying interest in possession (QIIP)) the beneficiary is treated as terminating the interest (section 51 of the Inheritance Tax Act 1984 (IHTA 1984)) and is thus making a transfer of value by virtue of IHTA 1984, s 52(1). In this scenario, consideration was received and this amount was deducted from the value of the property in which the interest subsisted. Typically, the consideration received for...

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Tax weekly highlights—30 January 2025

This week's edition of Tax weekly highlights includes: (1) HMRC’s announcement of a consultation on draft MTT and DTT supplementary guidance, (2) News Analysis of the FTT’s decision in Bryan Robson Limited that consideration attributable to the exploitation of image rights was outside the scope of IR35, and (3) News Analysis of the UT’s decision on EIS disqualifying arrangements in Hoopla Animation Ltd.

Private Client weekly highlights—30 January 2025

This week’s edition of Private Client highlights includes: (1) MacPherson v Sunderland City Council, in which the Court of Appeal clarified the proper method for assessing mental capacity in litigation; (2) XY withdrawal of treatment, a decision concerning the relevance of P’s religion and belief in prolonged disorder of consciousness cases; (3) the Hansard Society highlights concerns over delegated powers in the Terminally Ill Adults (End of Life) Bill; (4) Demetriou v Revenue and Customs Commissioners, which held that a fisheries business did not qualify for business property relief; (5) Bryan Robson Ltd v HMRC, in which the FTT decided that IR35 does not apply to consideration attributable to the exploitation of image rights; (6) further analysis of the Supreme Court decision in Hirachand; and (7) Private Client launches new Regulatory compliance for Private Client topic.