Continued from page 1
The Implications of
Charge ==============================
Most of
Inheritance Tax Planning techniques usually involve a widow or widower having continued enjoyment of their former spouse's share of
property and thus it would appear on first inspection that in
majority of cases
charge would not apply as
transferor themselves would not be around to continue to enjoy or benefit from
property.
However, a problem seems to arise where a couple own their property as joint tenants prior to commencing their tax planning strategy and subsequently changing their ownership title to tenants in common. Where
widow or widower formerly owned
property as joint tenants they had a share in ownership of
whole property. This means that
new Income Tax charge could conceivably apply to their continued occupation of
property after their spouse's death.
A possible consequence of this for
future might mean that instead of acquiring property as joint tenants which has been
general rule,
wise policy would be to own
property as tenants in common instead. But how many people are aware of this distinction? Will legal advisors be prepared to explain
tax implications of acquiring property with
different legal titles?
Conclusion ==========
How far will
new charge impact on current Inheritance Tax Planning schemes? As yet, it is too soon to tell, as
rules have not been fully fleshed out and as yet, it is too soon to say with any certainty what will happen and which schemes will be affected.
But it seem fair to argue that
current Labour Government is doing its utmost to tax its citizens at every possible turn. Inheritance Tax avoidance schemes - indeed any tax avoidance scheme -are not unlawful. Planning for
future does not mean that people are engaging in tax evasion - which IS unlawful. But
policies being employed leave an uncomfortable impression of an angry parent chastising their child simply for being astute and planning for
future!
Needless to say,
whole approach leaves a somewhat bitter taste in one's mouth.
JsByrne LLB (Hons) LPc. www.Draft-Your-Will.com

Miss JsByrne holds a Bachelor of Law degree with Honours & a post-graduate diploma in Legal Practice. Also gained qualification in Wills Writing & is the owner/author of www.Draft-Your-Will.com and DYW Wills & Estate Planning Newsletter.