Business and financial
Inheritance Tax advice H
Ian Finch from Martin Aitken & Co Chartered Accountants describes the new settlement Nil Rate Band
MRC recently announced new regulations for the tax treatment of trusts, created in the lifetime of an indi- vidual, with the changes
taking effect from 6 June 20ı4. The changes are likely to result in the generation of more tax revenues and increased compliance requirements. Trusts are useful tax shelters to reduce
the value of your Inheritance Tax (IHT) estate without making an outright gift, however, the tax rules are complex. A charge to IHT can arise on a number of occasions – assets going into and out of a trust may crystalise a liability, while there is also a ı0-year charge levied on assets held in the trust. The ‘mischief’ that HMRC is seeking
to prevent is the practice of an individual creating more than one trust on separate
dates (known as ‘pilot trusts’) and trans- ferring assets into the trusts. With each new trust established, a new Nil Rate Band (NRB) is created. If the value of the assets held in the trust is below the NRB (currently £325k) IHT could be avoided. HMRC deemed this practice as unfair
and have introduced new rules. In general the new rules will apply to trusts created after 6 June 20ı4. An individual will have their own ‘life-
time’ NRB (known as the Settlor’s Nil Rate Band – SNRB) – the practice of creating new trusts every seven years will no longer lead to a tax saving. If an individual creates more than one trust, he/she will need to allocate the SNRB between each trust created, in whatever ratio they choose. This may give rise to additional IHT. The good news is that the new rules cater for a simplified method of working out the
IHT charge for trusts and this includes pre-6 June 20ı4 trusts.
® For more information on the issues raised in this article, contact financial services expert Ian Finch at
if@maco.co.uk
Scottish Dental magazine 79
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92