The Implication of Income Tax Charge on Estate Planning

Written by Miss JS Byrne

Overview ========

Inrepparttar Pre-Budget Report of December 2003repparttar 119198 Chancellor Gordon Brown announced proposals to levy an Income Tax charge from 6th April 2005 in those circumstances whererepparttar 119199 transferor of an asset retains and interest or continues to benefit from that asset. Inrepparttar 119200 instance of real property,repparttar 119201 'benefit' envisaged isrepparttar 119202 transferor continuing to reside inrepparttar 119203 property he/she has allegedly given away.

Howrepparttar 119204 Charge Applies ======================

The Government refer to such assets as 'pre-owned assets' and, broadly speaking, its intention is to taxrepparttar 119205 'annual value' of such assets as a benefit-in-kind onrepparttar 119206 former owner still enjoyingrepparttar 119207 use ofrepparttar 119208 asset. The annual value on whichrepparttar 119209 charge is based will berepparttar 119210 open-market rental for a property or a fixed percentage ofrepparttar 119211 capital value of most other assets to whichrepparttar 119212 new charge applies. Any amounts whichrepparttar 119213 transferor pays forrepparttar 119214 use ofrepparttar 119215 asset - rent for example - will be deducted fromrepparttar 119216 annual value in arriving atrepparttar 119217 taxable benefit.

The charge will also apply if a person providesrepparttar 119218 funds to purchase an asset which they go on to enjoyrepparttar 119219 benefit of after 5th April 2005.

Rationale Behindrepparttar 119220 Charge ===========================

The charge is intended to counter many Inheritance Tax planning schemes, but unfortunately, it will also impact many innocent and unintended victims. Thankfully,repparttar 119221 legislation has included some exceptions torepparttar 119222 application ofrepparttar 119223 charge. The charge will not apply if;

The asset was gifted before 8th March 1986

The asset is owned byrepparttar 119224 transferor's spouse

The asset is, in fact, still caught byrepparttar 119225 'Gifts with Reservation' rules and as such Inheritance Tax applies instead (hence,repparttar 119226 Income Tax charge will not be levied on top).

The asset was sold at an arm's length price for cash (even if to a connected party).

The transferor ofrepparttar 119227 asset had themselves inherited it and their ownership had ceased as a result of a Deed of Variation affecting that inheritance.

The transferor's continued enjoyment ofrepparttar 119228 asset is merely incidental or has arisen only as a result of an unforeseen change in family circumstances.

The annual taxable benefit (after deducting any contributions byrepparttar 119229 transferor, where necessary) does not exceed £2,500.

The Inland Revenue have also confirmed thatrepparttar 119230 charge will not apply in most cases where a taxpayer has funded life insurance policies held on trust. Finally, there is also an 'Opt Out' option wherebyrepparttar 119231 transferor can opt not to payrepparttar 119232 charge providedrepparttar 119233 asset is included back into their estate and therefore consequently being subject to Inheritance Tax.

Intellectual Property Defined

Written by Nashville

Ignorance ofrepparttar law excuses no one. If you are unaware of your law, then you are in for big trouble. To better understand what are your rights and duties, educate yourself.

Issues regarding intellectual property rights are an important topic of discussion as many things revolve around this theme. Knowing what an intellectual property isrepparttar 119197 first step in our education. The U.S. Department of State defines it as:

“Creative ideas and expressions ofrepparttar 119198 human mind that possess commercial value and receiverepparttar 119199 legal protection of a property right. The major legal mechanisms for protecting intellectual property rights are copyrights, patents, and trademarks. Intellectual property rights enable owners to select who may access and use their property, and to protect it from unauthorized use.”

This definition gives emphasis onrepparttar 119200 word protect. Indeed, it is designed to extend protection torepparttar 119201 creator of a certain creative work or a product. Legal provisions are installed to giverepparttar 119202 ownerrepparttar 119203 exclusive right to control access and use of his property. The law provides for specific procedures when a violation of these rights is committed.

Copyrights and industrial property are two categories that make up intellectual property.

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