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View Full Version : IHT - nill rate band trusts dont always work



sober
02-05-2007, 00:19 AM
http://www.thisismoney.co.uk/tax-advice/inheritance-tax/article.html?in_article_id=419414&in_page_id=78

I wonder if anyone has a view on this, where death of wife makes her contribution to family home as nill in consideration

If instead of dying, had she divorced the husband - she would have received half of the house if not more. HMRC has got its head stuck up its SACK BIDE !

kam
02-05-2007, 08:06 AM
Well i think it is a joke, just another way to collect more taxes.

TaxationPete
02-05-2007, 08:07 AM
I am not sure how the Dr put a Tennants in Common Trust in place but he was ill advised. Normally a 'Deed of Trust' shares everything in the estate equally and a 'Nil Rate Band Discretionary Trust' receives on one spouse passing away 1/2 the estate's worth or £300,000. This paper value is loaned back to the estate as though nothing had changed. When the surviving spouse passes away the IHT calcualtion against the estate does not incluse the value which is in Trust, it may be smaller than originally becuase the survivor lived a long time and needed to use those funds, but what is in the Trust now passes to the named beneficaries. This is a well tried and tested IHT efficient Trust and avoids the problem of 'contributions'. I wrote an article last year and to keep it simple I used the 'Tenants in Common' to demonstate the property ownership angle but as I said in practice a 'Deed of Trust' inherent in both wills resolvs ownership of the estate and avoids having to micro manage all the accounts and savings to contain 1/2 the moveable asset. Hope that helps. Regards Peter

kam
02-05-2007, 08:12 AM
I am not sure how the Dr put a Tennants in Common Trust in place but he was ill advised. Normally a 'Deed of Trust' shares everything in the estate equally and a 'Nil Rate Band Discretionary Trust' receives on one spouse passing away 1/2 the estate's worth or £300,000. This paper value is loaned back to the estate as though nothing had changed. When the surviving spouse passes away the IHT calcualtion against the estate does not incluse the value which is in Trust, it may be smaller than originally becuase the survivor lived a long time and needed to use those funds, but what is in the Trust now passes to the named beneficaries. This is a well tried and tested IHT efficient Trust and avoids the problem of 'contributions'. I wrote an article last year and to keep it simple I used the 'Tenants in Common' to demonstate the property ownership angle but as I said in practice a 'Deed of Trust' inherent in both wills resolvs ownership of the estate and avoids having to micro manage all the accounts and savings to contain 1/2 the moveable asset. Hope that helps. Regards Peter

have you got a link to the article Pete?

TaxationPete
02-05-2007, 08:31 AM
Email me and I send it to you. Regards Peter