Inheritance tax – Clever Splitter http://cleversplitter.com/ Sat, 08 Jan 2022 21:39:54 +0000 en-US hourly 1 https://wordpress.org/?v=5.8 https://cleversplitter.com/wp-content/uploads/2021/07/icon-2021-07-28T170948.334-150x150.png Inheritance tax – Clever Splitter http://cleversplitter.com/ 32 32 Inheritance Tax Changes for Supported Farmers Explained https://cleversplitter.com/inheritance-tax-changes-for-supported-farmers-explained/ Wed, 05 Jan 2022 12:29:00 +0000 https://cleversplitter.com/inheritance-tax-changes-for-supported-farmers-explained/ My father wants to transfer the farm to me. I have been a home farmer with my dad since I left college. His health is precarious and we as a family are concerned that he will need to be treated in a nursing home for the foreseeable future and are obviously concerned about the cost. […]]]>

My father wants to transfer the farm to me. I have been a home farmer with my dad since I left college. His health is precarious and we as a family are concerned that he will need to be treated in a nursing home for the foreseeable future and are obviously concerned about the cost. I’ve heard that there have been changes in the Fair Deals Scheme, but I’m not sure if we as a family are eligible to take advantage of the positive changes. Can you explain if they would be applicable to our situation and what should we do?

Dear reader,

Under the Nursing Home Support Scheme Act 2009 (the scheme is known to many as the Fair Deal scheme), farm assets that have been transferred within five years of the filing of the application for State aid or ancillary state aid will be taken into consideration for the purposes of calculating the applicant’s means.

An eligible applicant must provide 80% of assessed income and 7.5% of assessed assets each year. Payments are capped at three years.

This means that, with regard to the main private residence, the maximum contribution that may apply is 7.5% of the value of the residence for the first three years of custody.

This means that the farm is included in the valuation of assets unless it was transferred to you by your father more than five years ago.

However, there has been a new change in the Fair Deal Scheme with respect to farms and indeed all businesses introduced on October 20, 2021, whereby the three-year cap also applies to these assets if certain conditions are met. fulfilled.

The conditions are:

  • You must apply for the appointment of your farm successor who must operate the farm for at least six years. The successor must be at least 18 years old and be a child, nephew, niece, grandchild, brother, half-brother, uncle, aunt, son or daughter-in-law or parent or step-parent. A successor cannot be appointed until the applicant (the person in need of care) is taken care of. A request must be submitted as soon as possible so that the six-year period can begin to run.
  • Your farm must be operated by you, your partner or your proposed family successor for at least three of the past five years. A legal charge must be placed on your title to your farm.

You must apply to the HSE if you want the operation to be capped at the three-year period. The HSE can review your application and verify that you meet the conditions during the six-year period.

You must prove that the farm was actively operated by you or your farming successor. You will need to produce proof of the DAFM, such as a herd number registered with herd owner status for each year since the family successor was appointed or a sheep herd number.

Other evidence may include proof that you produce and deliver milk to a registered milk buyer and certified farm accounts and documentation of hay and silage sales. You need to make sure you keep records for each year.

This is a welcome development after years of lobbying by the IFA and other organizations. Farmers who are currently in nursing homes before the new law goes into effect can still apply to cap the farm at three years and must apply by April 20, 2022, and must do so as soon as possible.

  • Karen Walsh, originally from an agricultural background, is a lawyer at Walsh & Partners, Solicitors, 17, South Mall, Cork (021-4270200), and author of Farming and the Law. Walsh & Partners also specializes in personal injury claims, transfer of ownership, probate and family law.

– E-mail: info@walshandpartners.ie – Web: www.walshandpartners.ie


While every precaution is taken to ensure the accuracy of the information in this article, Attorney Karen Walsh accepts no responsibility for any errors or omissions, and you should seek legal advice regarding your particular situation. as soon as possible.


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Inheritance Tax: How to Make the Most of All HMRC Allowances in 2022 | Personal Finances | Finance https://cleversplitter.com/inheritance-tax-how-to-make-the-most-of-all-hmrc-allowances-in-2022-personal-finances-finance/ Tue, 04 Jan 2022 15:02:00 +0000 https://cleversplitter.com/inheritance-tax-how-to-make-the-most-of-all-hmrc-allowances-in-2022-personal-finances-finance/ More people are caught in the inheritance tax net as property prices rise, but the threshold remains the same. Although inheritance tax cannot be avoided, there are several ways to legally reduce the amount of tax payable. Hundreds of taxpayers are caught off guard every year when it comes to inheritance taxes, with the latest […]]]>

More people are caught in the inheritance tax net as property prices rise, but the threshold remains the same. Although inheritance tax cannot be avoided, there are several ways to legally reduce the amount of tax payable.

Hundreds of taxpayers are caught off guard every year when it comes to inheritance taxes, with the latest figures showing it amounts to around a quarter of a million pounds per person.

However, there are a number of ways homeowners can lower the IHT bill on their estates and give family members money without them getting slapped by a huge bill from HM Revenue and Customs (HMRC).

Generally, Britons are exempt from inheritance tax if their estate is worth £ 325,000 or less

However, there are some exceptions to this threshold whether people donate to friends, family members, or a spouse.

READ MORE: Cold Weather Triggered Payments: How to Verify Via Zip Code Checker

How to avoid paying inheritance tax in 2022?

  • The value of his estate is below the threshold of £ 325,000.
  • Leave anything over the £ 325,000 threshold to a spouse, civil partner, charity or community amateur athletic club.
  • This allowance increases to £ 500,000 if the British donate their house or property to their children or grandchildren.

Before giving money to a family member, Brits should check if they can carry over a previous tax deduction.

If the British do not use their allowance in a twelve month period, they can carry it over to a tax year.

Donations of £ 5,000 can also be made if someone gets married.

A parent can give their child up to £ 11,000 tax-free in a year – a gift of £ 5,000 made in return for the marriage plus that year’s £ 3,000 annual exemption and allowance of £ 3,000 from last year if it hasn’t already been used.


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Readers’ Forum on Taxation: Inheritance Tax – Taxation https://cleversplitter.com/readers-forum-on-taxation-inheritance-tax-taxation/ Wed, 29 Dec 2021 08:00:00 +0000 https://cleversplitter.com/readers-forum-on-taxation-inheritance-tax-taxation/ UK: Readers’ Forum on Taxation: Inheritance Tax December 29, 2021 Berg kaprow lewis To print this article, simply register or connect to Mondaq.com. Writing for the Taxation magazine readers’ forum, BKL tax advisor Terry Jordan answers a reader’s question on Inheritance Tax (IHT) on moving a family home. “A married parent offered his child the […]]]>

UK: Readers’ Forum on Taxation: Inheritance Tax

To print this article, simply register or connect to Mondaq.com.

Writing for the Taxation magazine readers’ forum, BKL tax advisor Terry Jordan answers a reader’s question on Inheritance Tax (IHT) on moving a family home.

“A married parent offered his child the family home but continued to live there with him.

During this time, the married parent did not pay the market rent for his occupation. When the parent finally died, the house was worth more than the zero rate bracket for the residence. The inheritance tax became payable because the house was a donation with reserve of profit.

By an act of amendment, it was agreed that the child would bequeath the house to the surviving spouse of the deceased. Would this count as a transfer between husband and wife and be treated as exempt from inheritance tax? Are inheritance taxes then owed by the estate of the deceased or the surviving spouse on the house?

I look forward to readers’ responses. Application 19,861 – Confused.

Response from Terry Jordan: The FA 1986 “sharing” exemption, section 102B (4) could have been used.

“We are dealing here with two tax fictions.

A father who was apparently the sole owner of the matrimonial home gave it to his son and the two occupied the property. Since the father has not paid rent, the provisions relating to gifts of inheritance rights with reserve of benefits in FA 1986, art. 102 and Sch 20 consider that the property is part of the father’s estate on death even if the son was the legal owner.

With better guidance, the father could have taken advantage of the Section 102B (4) “partition” exemption by giving a share to the son and keeping a share. His donation would then have constituted a potentially exempt transfer and his retained part would have benefited from a discount for co-ownership.

By an act of amendment, the son passed the house to his widowed mother. Where such an instrument is executed within two years of death and contains inheritance and / or capital gains tax records, the transfer may be treated for such tax purposes as effected by the deceased. In effect, the variation constitutes a transfer by the initial beneficiary.

It is understood that in addition to the provisions made by will and under the provisions relating to intestate succession, the words “or otherwise” in IHTA 1984, s 142 (1) (a) cover assets previously held in as joint beneficiary tenants who have accumulated by right of survivorship. Any doubt that the “provisions” could cover assets covered by the rules for booking benefits are dispelled by Article 142 (5).

Consequently, the act passed by the son will not grant the exemption of the spouse in the estate of his late father. He made the situation much worse because he added value to his mother’s estate and made a donation himself with reserve of benefits unless he paid market rent for his future occupation. It is possible that the estates of both parents pay inheritance tax.

The article is also available on the Taxation website.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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Inheritance tax: the province of Buenos Aires is the only district that applies it, rates and exceptions https://cleversplitter.com/inheritance-tax-the-province-of-buenos-aires-is-the-only-district-that-applies-it-rates-and-exceptions/ Tue, 28 Dec 2021 15:29:37 +0000 https://cleversplitter.com/inheritance-tax-the-province-of-buenos-aires-is-the-only-district-that-applies-it-rates-and-exceptions/ The government has defended that the provinces can advance in 2022 the application of what is called the inheritance tax, a mechanism that is used in much of the world to collect by the free transfer of assets, whether by bequest or donation. Until now, the only neighborhood which applies is the Province of Buenos […]]]>

The government has defended that the provinces can advance in 2022 the application of what is called the inheritance tax, a mechanism that is used in much of the world to collect by the free transfer of assets, whether by bequest or donation.

Until now, the only neighborhood which applies is the Province of Buenos Aires, which raised just over $ 83 million for the concept last year.

the the debate on this tax is global and the Organization for Economic Co-operation and Development (OECD) advised in May 2021 that the nations apply or download inheritance tax as a mechanism “which can play an important role in increasing income, reducing inequalities and improving efficiency”.

Read also In the last week of the year, the Senate votes on personal property and Congress awaits a call for extraordinary nominations

President Alberto Fernández receives governors from 5:00 p.m. to sign the Fiscal Consensus, which allows provinces to initiate or at least discuss the implementation of inheritance taxes. Horacio Rodríguez Larreta’s administration refused to sign this agreement because “it includes a tax increase”.

The Secretary of the Provinces, Silvina batakis, felt that it is “tax best viewed by the international academy in that many speak of meritocracy. But it’s not meritocracy when you get different inheritances over time and how they stack up ”.

What is inheritance tax

It’s a tax on any increase in wealth obtained free of charge following a transfer or an act of this nature, which includes “property located in its territory and / or benefits to human or legal persons domiciled there”.

The tax can reach the following situations:

  • the inheritances;
  • the legacy;
  • Donations;
  • the advances of inheritance;
  • Any other transmission what is a wealth enrichment for free.

The history of inheritance tax in Argentina

With variations, the homage made a long trip to Argentina. The first antecedent may lie in 1801 when it was established Inheritance tax, which had aliquots between 1% and 4%; for inheritances between spouses, collaterals or in favor of foreigners. has compiled a book by economists Andrés Cappa, Augusto Bouzas and Melisa Girard from the Floreal Gorini Cultural Cooperation Center.

Work abounds which in 1853 the tax was ratified by the provincial jurisdictions and national territories of the time and was called “Tax on the free transmission of goods”.

Already there 1923 renamed the inheritance tax, which it applied to children, which endowed it with a greater redistributive capacity; and the proceeds were used to finance primary education.

In 1951At the same time, the law established the application throughout the national territory of the “Tax replacing the tax on the free transmission of goods”. It imposed 1% per annum on the assets, both in capital and in reserves, of capital companies. It was in effect until 1973, when it was repealed and replaced by the “Net Worth Tax”, to incorporate people as tax subjects.

One year later, in 1974, the law that created the “Free of tax on wealth enrichment”, which only concerned assets located in the federal capital and added “shares, quotas or social participations and other securities representing capital”. Dlasted two years, was repealed and the Wealth tax throughout the national territory.

How inheritance tax is applied in the province of Buenos Aires

In 2009, the debate on the collection of inheritance tax returned to the fore. The province of Buenos Aires is the only one since 2011 the wall lamp.

Thus, natural or legal persons domiciled in the province, or a beneficiary who receives property located in the constituency, pay tax when free streams exceed $ 1.34 million in case they come from parents, children or spouses, While for other relationships or “acquaintances” is billed from the $ 322,800.

Also read: Martín Guzmán now says the agreement with the IMF will be signed on February 10: there are strong divergences on the value of the dollar

If it is a urban property intended for a single-family house, the payment of the tax will be exempt provided that the free transmission is due to a death in favor of the spouse, ascendants or descendants and that does not exceed $ 1.15 million.

the Buenos Aires Treasury added 0.2% to its collection last year tributary total in the concept of Free Goods Transfer Tax (ITGB). He raised $ 83 million which, according to provincial tax law 10,397, goes to education.

Which countries have inheritance taxes and how do they apply them?

According to a book by OECD, 24 member countries of this organization collect an inheritance or bequest tax. However, the entity warned that the income from this concept has weakened overtime. Nowadays, represent 0.5% of total tax revenue of the OECD, when in the The 1970s were double that.

There are 21 nations this they collect heir tax, while in United Kingdom, Denmark and United States the inheritance tax, which applies to the equity of the deceased person.

According to the report, as of May 2021, South Korea at the forefront of collected revenue for inheritance tax, with 1.6% of your total. they follow him Belgium (1.4%); France and Japan (1.3% each) and Finland (0.7%). The OECD average is 0.53%. Meanwhile, the last place is occupied by Lithuania with 0.1% of the total collected.

Disclaimer: This article is generated from the feed and not edited by our team.


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The Government has spoken out in favor of inheritance rights and has scheduled it to be debated in 2022: “Generate equity” https://cleversplitter.com/the-government-has-spoken-out-in-favor-of-inheritance-rights-and-has-scheduled-it-to-be-debated-in-2022-generate-equity/ Sun, 26 Dec 2021 15:51:41 +0000 https://cleversplitter.com/the-government-has-spoken-out-in-favor-of-inheritance-rights-and-has-scheduled-it-to-be-debated-in-2022-generate-equity/ The Secretary of the Provinces, Silvina Batakis. considered that the application of a inheritance tax “Generates fairness” and argued that the question he will be treated in 2022 with the governments of subnational states. The 2022 tax consensus promoted by the government envisages that the 24 jurisdictions can create an inheritance tax. Batakis explained that […]]]>

The Secretary of the Provinces, Silvina Batakis. considered that the application of a inheritance tax “Generates fairness” and argued that the question he will be treated in 2022 with the governments of subnational states.

The 2022 tax consensus promoted by the government envisages that the 24 jurisdictions can create an inheritance tax. Batakis explained that this tribute “is in all developed countries” and that “corresponds to the provinces”.

Also read: The 2022 budget consensus opened a wedge between Horacio Rodríguez Larreta and radical governors and the issue could sneak into the Juntos por el Cambio meeting

The head of the Ministry of the Interior declared that “by the international academy It is the tax best seen because it generates equity in what many speak, of the Meritocracy”.

Batakis said in criticizing macrismo: “It is not meritocracy when you receive different inheritances over time and how they accumulate. “

Government has denied promoting a tax hike due to 2022 tax consensus

The secretary of the provinces He denied that he was promoting a tax hike negotiations with the governors for the 2022 fiscal consensus and interviewed the president of Buenos Aires, Horacio Rodriguez Larreta, not to join.

Batakis spoke of a “fiscal harmonization of provincial taxes between all jurisdictions”.

The provincial secretary said they are not “promoting a tax increase” but will establish aliquot limits, the application of which will remain in the hands of each provincial administration.

Batakis said the 2022 fiscal consensus “restores the autonomy of the provinces and gives them stability and legal certainty regarding taxes in each jurisdiction.”

Silvina Batakis criticized Horacio Rodríguez Larreta for not joining the 2022 tax consensus

The provincial secretary criticized without mentioning the head of government in Buenos Aires, saying that “many leaders believe that they are still in the countryside ” and asked “to put aside this period”, in statements to Radio 10.

Batakis questioned that they had received refunds from all jurisdictions for the 2022 tax consensus proposal except the city of Buenos Aires.

The 2022 budget consensus opened a wedge between Horacio Rodríguez Larreta and radical governors

The 2022 fiscal consensus provokes a crack in Together for Change since Rodríguez Larreta rejects him, unlike his UCR peers.

Provincial leaders of the opposition coalition Gerardo Morales placeholder image (Jujuy), Gustavo Valdes (Currents) and Rodolfo Suárez (Mendoza) will support the program.

Discrepancies due to the 2022 fiscal consensus would be discussed at the meeting of the National Council of Ensemble for Change

The crack of Ensemble for Change by the 2022 fiscal consensus would be discussed Monday at the meeting of the National Council of the opposition coalition.

One of the reasons Rodríguez Larreta will not join is that, depending on the project, the jurisdictions that sign it undertake to refrain for one year from initiating legal proceedings or suspend those already started by the regime federal partnership.

The Rodríguez Larreta administration made presentations to the Supreme Court of Justice to protest the government-ordered withdrawal of funds.

Disclaimer: This article is generated from the feed and not edited by our team.


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Inheritance Tax Warning As Brits Face Shocking Interest Rate Bill – “Very Unfair!” “| Personal Finances | Finance https://cleversplitter.com/inheritance-tax-warning-as-brits-face-shocking-interest-rate-bill-very-unfair-personal-finances-finance/ Sun, 19 Dec 2021 04:01:00 +0000 https://cleversplitter.com/inheritance-tax-warning-as-brits-face-shocking-interest-rate-bill-very-unfair-personal-finances-finance/ 40 percent inheritance tax is chargeable, and for some people, the smart decision is to pay this in installments. However, people should be aware that interest is charged by HM Revenue and Customs (HMRC) if a person does not pay the IHT bill by a certain date. The executor has six months from the end […]]]>

40 percent inheritance tax is chargeable, and for some people, the smart decision is to pay this in installments. However, people should be aware that interest is charged by HM Revenue and Customs (HMRC) if a person does not pay the IHT bill by a certain date. The executor has six months from the end of the month in which the person died to pay the inheritance tax due, after which interest is charged on the amount of tax due.

However, a senior expert expressed frustration with the policy, especially since the administration of estates is often tied in knots for the British.

Express.co.uk spoke with Michael Culver, President of Solicitors for the Elderly and Founder of Culver Law Ltd.

He said: “When you think of inheritance tax, I always think it’s a huge issue that people have to pay interest within six months of the end of the month of death.

“It’s really, really frustrating, especially during COVID-19, that they haven’t had any extenuating circumstances to prolong this at all.

READ MORE: State pension: Some retirees now have to pay NHS processing fees

“But in the majority of cases, where maybe the house is the primary asset, you can’t pay the IHT until you are able to sell the property.”

Regardless of the personal circumstances, however, Mr Culver said the interest would show up within a “very tight timeline.”

He continued, “It’s very unfair – indeed, one of the most unfair things about inheritance tax.

“Interest comes in so quickly for inheritance tax. Whereas, for income tax, you have until January 31 after the end of the tax year concerned before having to file your tax return and before tax is applied before.

“They give a lot more time in a person’s life when they usually have their affairs in order and might have an accountant to help them.

“Whereas in death there is less time, and as executor, a lot of you have to figure out what someone had.

“There are problems with the probate registry and delays, which means a person can’t even put the house up for sale, let alone find a way to pay for it.

“However, the tax authorities are already knocking on your door to charge you interest. “

Mr Culver says the six-month grace period for paying inheritance tax has been set at that level for a long time.

It appears that incomes have not budged to change that, even with a sad increase in deaths from COVID-19.

This, he warned, is likely to increase the backlog of probate services even now, compounding the problem.

He concluded, “You might have eight or nine months before you can even market the property, and then it might take another six months to sell.

“At this point, you’re past the year mark, so you might have another inheritance tax payment due with more interest accrued.

“This is why it is so important to try to get your own house in order as soon as you can. “


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How can I avoid inheritance tax for my nephews? https://cleversplitter.com/how-can-i-avoid-inheritance-tax-for-my-nephews/ Fri, 17 Dec 2021 10:30:00 +0000 https://cleversplitter.com/how-can-i-avoid-inheritance-tax-for-my-nephews/ Q. I am trying to plan my estate. I have three nephews to whom I want to give everything but I don’t want them to have to pay the inheritance tax. Is there a way to avoid the tax? – Uncle A. We are happy that you are trying to plan ahead. You have a […]]]>

Q. I am trying to plan my estate. I have three nephews to whom I want to give everything but I don’t want them to have to pay the inheritance tax. Is there a way to avoid the tax?

– Uncle

A. We are happy that you are trying to plan ahead.

You have a few options, but it will take a little planning. Let’s start with the beginning.

New Jersey inheritance tax is a tax levied on certain transfers from a deceased person to a beneficiary, based on beneficiary relationship to the deceased, said Samantha Rocco, a lawyer at Einhorn. Barbarito, Frost & Botwinick in Denville.

There are four categories of beneficiaries: Class A, C, D and E. Class B was phased out in the 1960s, she said.

“The nieces and nephews are Category D beneficiaries “ Rocco said. “As a general rule, a bequest of $ 700,000 or less to a Class D beneficiary is subject to an inheritance tax of 15% and any amount over $ 700,000 is subject to an inheritance tax of 16%.

However, there are exceptions to this general rule.

An exception is that the product of a death benefit life insurance payable to a named beneficiary, or beneficiaries, are not subject to New Jersey inheritance tax.

She offered this example. Let’s say Joan Smith dies, leaving her nephew $ 100,000 in cash. The nephew’s inheritance will be subject to an inheritance tax of 15%. This means that on the bequest of $ 100,000, a tax of $ 15,000 will be imposed ($ 100,000 * 15%). The net amount the nephew will receive is $ 85,000 ($ 100,000 less inheritance tax of $ 15,000).

Now, imagine rather that Jeanne designates her nephew as beneficiary of her life insurance policy, who has a death benefit of $ 100,000, rather than giving him $ 100,000 in cash. Since the life insurance death benefit proceeds are paid to a named beneficiary, the proceeds are exempt from New Jersey inheritance tax and, therefore, the nephew will inherit the entire $ 100,000, a declared Rocco.

In this case, no inheritance tax will be due, she said.

Rocco noted that certain specifically defined pensions are also exempt from New Jersey inheritance tax. Namely, by NJAC Section 18: 26-6.14, “All payments on death under the Teachers ‘Pension and Annuity Fund, the Public Employees’ Retirement System of New Jersey, and the Police and Firemen’s Retirement System of New Jersey, and any other state, county and may have a tax exemption clause as broad as that of the three major state regimes discussed in this section. . . are exempt from New Jersey inheritance tax.

Rocco said another effective way to minimize the amount of inheritance tax in New Jersey is to start asset donations over its lifetime, whether directly or in trust.

It won’t be right for everyone, as some people might not be able to afford it in their lifetime, she said.

With respect to living donations, it is important to note that under the law, donations made within three years of death are considered “given for the purpose of death”.

“Gifts given in anticipation of death are subject to inheritance tax, even if the person was alive at the time the gifts were made,” Rocco said. “To rebut this presumption, one must convince the New Jersey Division of Taxation that the gifts made within three years of death were not gifts given in contemplation of death.

Thus, if you bequeath your estate to your nephews, unless your estate is made up solely of life insurance policies designating your nephews as beneficiaries or one of these pension plans, inheritance tax will be charged, a declared Rocco.

Also note that your will may address the issue of who will pay the inheritance tax.

“The two main options are your estate – the amount left over after your debts and specific bequests, if any, are satisfied – will pay inheritance tax, which will reduce the amount each nephew receives, or each nephew can pay. his. part of inheritance tax due.

Email your questions to Ask@NJMoneyHelp.com.

Karin Price Mueller writes on Bamboo column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.com‘s weekly electronic newsletter.



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Legacy Release Helps Clients Navigate Troubled Estate Tax Waters https://cleversplitter.com/legacy-release-helps-clients-navigate-troubled-estate-tax-waters/ Thu, 16 Dec 2021 16:00:30 +0000 https://cleversplitter.com/legacy-release-helps-clients-navigate-troubled-estate-tax-waters/ A big tax bill at the start is the last thing you want when dealing with a complex inheritance. Legacy version can help customers navigate those rough waters ‘One of the reasons The old version exists is to help our clients cope with the problem of having to pay inheritance tax before actually receiving their […]]]>

A big tax bill at the start is the last thing you want when dealing with a complex inheritance. Legacy version can help customers navigate those rough waters

‘One of the reasons The old version exists is to help our clients cope with the problem of having to pay inheritance tax before actually receiving their inheritance, ”explains Simon Dawson, Commercial Director of the company.

This is a situation, he explains, which sometimes happens to HNW customers due to an issue in UK probate rules that require inheritance tax to be paid before a probate clearance can be issued. granted. This can pose particular problems for asset-rich and cash-poor beneficiaries, who may end up with a bill that exceeds their cash flow at the time.

The more complex the field, says Dawson, the greater the risk of other problems. “Recipients are likely to have different priorities, and while some may be happy to wait, others may need to access their inheritance earlier, perhaps to pay for school fees or a wedding. “he said. “In other cases, it may be necessary to hire a forensic accountant to trace the assets, or a lawyer who is unable to work off-line. These may not be testamentary costs, which means they cannot be taken out of the estate.

Under such circumstances, he tells Spear’s, Legacy Release can provide HNW clients with a quick and timely loan up to 70 percent of the estate. As the loan is secured by the value of the estate itself, rather than the credit status of the beneficiary, the money can be arranged reliably and quickly without complications.

Dawson would like to point out that the company’s loans are completely unconditional. “The advance can be used for almost any purpose,” he adds. “What matters to us is that the customer has the money when they need it most. In return, borrowers pay a lump sum of 2% of the amount borrowed, with a monthly fee of 1.35% taken from the balance. Payment is taken from the estate after probate has been paid.

With a background in litigation loan, Dawson draws parallels between the world of divorce loans – now an established part of HNW family law – and the emerging field of estate loans. “We are one of the few companies in the market here,” he adds. “We understand the complexity of the problem and the simplicity of the solution. “

While large retail banks previously offered specialized estate release loans, these offers have been curtailed in recent years. Part of the reason, says Dawson, is the heightened level of risk for lenders, especially when it comes to assessing large and complex areas. “As a lender, it’s entirely up to us to assess the value of the estate,” he says. “We do not require any personal guarantees or security because we bear the burden of risk. Since the loans are based on real assets, the risk of default is minimal.

As one of the emerging leaders in the field, Legacy Release recently received the support of a major financial partner backed by significant private equity. Dawson hopes this will help the company expand its presence and the estate loan market itself.

With a specialist firm providing execution services only to HNW clients, the proposal currently falls outside the regulatory orbit of the UK’s Financial Conduct Authority. One of the benefits of this, Dawson says, is the added agility it brings, as the company is able to lend quickly without any delay.

“As we develop our offering, we will almost certainly seek FCA approval,” he says. “At the moment, however, our focus is on the HNW community. And we know our customers value our ability to act as quickly as possible. ‘


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Inheritance tax warning: ‘middle-income’ Britons set to pay a heavy bill – act now | Personal Finances | Finance https://cleversplitter.com/inheritance-tax-warning-middle-income-britons-set-to-pay-a-heavy-bill-act-now-personal-finances-finance/ Sun, 12 Dec 2021 04:01:00 +0000 https://cleversplitter.com/inheritance-tax-warning-middle-income-britons-set-to-pay-a-heavy-bill-act-now-personal-finances-finance/ Middle-income families are heading for the 40 percent inheritance tax bracket due to rising house prices and the five-year freeze on IHT brackets. The combination of these two elements means that unsuspecting individuals will find themselves pushed above the tax exemption threshold. In fact, the Office for Budget Responsibility has predicted that the number of […]]]>

Middle-income families are heading for the 40 percent inheritance tax bracket due to rising house prices and the five-year freeze on IHT brackets. The combination of these two elements means that unsuspecting individuals will find themselves pushed above the tax exemption threshold. In fact, the Office for Budget Responsibility has predicted that the number of additional people reaching the threshold will rise to more than 41,000 per year by 2026.

As a result, many people hope to find ways to legally reduce their liability.

Samantha Warner, Product Manager at Arken.legal, spoke exclusively to Express.co.uk and shared some tips to help Brits alleviate an inheritance tax bill.

First, Ms. Warner recommended transferring the assets that a person holds into a trust.

This is because they will not be part of the person’s estate, thus reducing the IHT liability.

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A next action is to dismantle the zero rate residency tranche (RNRB), an essential reduction for inheritance taxes which concern property.

Ms Warner explained, “If you separate the RNRB, you can protect it for the direct line descendants and the rest of the estate can be put in trust.

“It can help with tax planning in families – if a person puts their estate in a trust rather than leaving it directly, the family can benefit from the trust while they are alive, but the assets will not be part of their estate at the time. death and can help keep the death estates of family members below the applicable tax thresholds.

“Splitting the RNRB makes it possible to offer it directly, thus taking advantage of the full value of this allocation to the extent possible. “

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A third way for someone to reduce their inheritance tax is through the Lifetime Gifting process.

Lifetime gifts can help Britons reduce the size of their estates on death, especially if a system is in place, Ms Warner said.

Gifts are generally exempt from the IHT as long as a person survives the gift for seven years.

However, if the donor does not survive the seven-year period, then the donation becomes a potentially exempt transfer failure. This means that the IHT is billed, albeit at a declining rate on a decreasing scale.

Setting up a program to donate part of the value of an estate is considered a good way to insure against IHT liability.

Ms Warner also recommended that Britons study the idea of ​​leaving part of their estate to charity when they die.

The inheritance tax bill will not include anything that a person decides to leave to charity.

It could be a win-win, allowing Britons to support a cause close to their hearts, while lowering their estate bills.

Ms Warner pointed out that leaving at least 10 percent of an estate to charity comes with bonuses as well.

This is because the rule states that if this is done, the IHT rate on the remaining assets is reduced from 40 percent to 36 percent.

Finally, the fifth tip for alleviating an inheritance tax bill is about using flexible life interest trusts.

Ms. Warner said, “Flexible life interest trusts allow a beneficiary to receive income from the trust for life.

“These trusts can be structured so that capital can also be offered, reducing the size of the asset over the lifetime.”

Generally speaking, if a person is worried about inheritance tax or wishes to make decisions to reduce their bill, they are invited to consult experts.

This is especially the case with more complex ideas around tax planning, such as the use of trusts.


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Inheritance tax warning as Britons face billions of dollars to live in their own homes | Personal Finances | Finance https://cleversplitter.com/inheritance-tax-warning-as-britons-face-billions-of-dollars-to-live-in-their-own-homes-personal-finances-finance/ Sat, 04 Dec 2021 04:01:00 +0000 https://cleversplitter.com/inheritance-tax-warning-as-britons-face-billions-of-dollars-to-live-in-their-own-homes-personal-finances-finance/ The inheritance tax is currently set at 40 percent, but with many people who hate this tax, they will want to legally avoid it. One of the main ways to avoid the direct debit is to leave everything to one partner, however, the partner must be a spouse or civil partner. Because of this, those […]]]>

The inheritance tax is currently set at 40 percent, but with many people who hate this tax, they will want to legally avoid it. One of the main ways to avoid the direct debit is to leave everything to one partner, however, the partner must be a spouse or civil partner. Because of this, those who are unmarried and cohabiting could face a potentially colossal tax bill, a leading expert warned.

“Let’s say you own a £ 1million property together and the surviving partner inherits. You get £ 325,000 tax-free, but the remaining £ 175,000 is taxable.

“So you have to come up with 40 percent of £ 175,000 – that’s £ 40,000 or £ 50,000 just to continue living in your own house as usual.”

The fact that a couple has lived together for years, if not decades, unfortunately does not matter under the current rules.

For this reason, people should be especially careful and take action if they wish, to avoid a bad shock.

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Ms Roche continued: ‘Unless you are married or in a civil partnership, you will potentially have to find thousands of pounds to pay that tax bill.

“This shows that no matter if it is your own possession or property, the tax will always apply.”

Ms. Roche explained that this is a consideration that many people overlook in their day-to-day lives.

But it could cause chaos later, and potentially a lot of financial grief.

Attitudes towards marriage and civil partnership are clearly changing, with ONS research showing a change.

Statistics have shown that the proportion of families comprising a cohabiting couple increased from 15.3% to 18.4% in the 10 years until 2019.

However, as times have moved in this direction, from a monetary standpoint, the system seems to stay the same.

Ms. Roche underlined: “The law has been changed with regard to marriage when one thinks of civil partnership.

“It is no longer only same-sex couples who can be civil partners, but also heterosexual couples.

“A lot of people don’t want to ‘get married’ as such, so this might be a solution if they hope to legally avoid tax.

“But whatever, it’s still a bit tricky for a lot of people.

“Some couples absolutely do not want to get married or have automatic inheritance tax, which is why they remain as a couple.

“But if you make this choice, you should be aware of the tax implications you might have on yourself.”

For some, however, the issue of marriage and inheritance is not a conscious decision, and therefore Ms Roche said some couples may wish to consider the matter.

She stressed the importance of exploring this issue further and possibly consulting experts to provide assistance.

Ms. Roche concluded: “Again, this is a knowledge of inheritance tax rules.

“It really is a minefield, and it’s definitely worth getting some advice because you can save a lot of money, time, and arguments by sorting it out in the first place.

“It might sound expensive, but it could be worth it – there’s a reason for that, because they’re going to cover everything. “


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