It may not seem like it but it has been over a year since the chancellor, Mr Darling turned the concept of Inheritance Tax planning with Wills completely on its head with his 2007 pre-budget report.
Since that date, many people have met with their wills solicitor to discuss the implications of these changes, specifically the transferable nil rate band that is now available to partners and spouses.
The three main issues that have been the most changed and require the most attention are: oWhether to continue with the inclusion of a nil rate band trust provisions in Wills; oWhere there has already been a death without the will being changed, should the new provisions be included; and oWhether an existing will should be changed.
Dealing with whether to include the nil rate band in the trust provisions.
It is always important to include the trust provisions in the will and do not assume that various clauses cannot be ignored.
This is mainly due to the fact that executors are unable to simply pick and choose which of the clauses in the will to act upon and which to ignore.
If the provision is explicitly stated in the will then it needs to and will be dealt with.
Turning to the second issue, a main issue to consider is the timing of the events in the scenario where the decision is taken to appoint a trust fund to the surviving spouse outright or in the form of a life interest trust arrangement.
If both of the measures suggested are implemented within two years of death, will allow for a level of exemption from IHT and thusly allow for a transfer of the nil rate band against the estate of the survivor.
However these decisions must not be taken lightly and require careful consideration.
No appointment of any kind should be executed within the first three months after death for the following reasons: oIf the assets are appointed to the surviving spouse after a period of three months but before two years of death, the provisions of the Inheritance Taxes Act 1984 treat the appointment as having taken place under the Will.
That is why spouse exemption is then available.
oHowever if this appointment is executed within three months the provisions stated above are not invoked and there is no availability for spouse exemption and therefore no nil rate band available to transfer or utilise.
Finally, any changes to IHT do overshadow other some other reasons that are equally as important and valid.
These decisions need to be taken having considered the circumstances of the survivor and any assets that may have been compromised in the estate.
If the survivor in question was of ill health and this is sufficient to require increased home care (i.
e.
home nurse), there will be some very viable attractions to consolidating the structure of the trust for the sake of asset preservation.
Similar to this method there may be some assets that quality for Business Property Relief or Agricultural Property Relief.
This is also the case for any assets that are likely to increase significantly in any value.
Any of these scenarios would require the structure of the trust remaining the same to help maintain the status of the assets.
Since that date, many people have met with their wills solicitor to discuss the implications of these changes, specifically the transferable nil rate band that is now available to partners and spouses.
The three main issues that have been the most changed and require the most attention are: oWhether to continue with the inclusion of a nil rate band trust provisions in Wills; oWhere there has already been a death without the will being changed, should the new provisions be included; and oWhether an existing will should be changed.
Dealing with whether to include the nil rate band in the trust provisions.
It is always important to include the trust provisions in the will and do not assume that various clauses cannot be ignored.
This is mainly due to the fact that executors are unable to simply pick and choose which of the clauses in the will to act upon and which to ignore.
If the provision is explicitly stated in the will then it needs to and will be dealt with.
Turning to the second issue, a main issue to consider is the timing of the events in the scenario where the decision is taken to appoint a trust fund to the surviving spouse outright or in the form of a life interest trust arrangement.
If both of the measures suggested are implemented within two years of death, will allow for a level of exemption from IHT and thusly allow for a transfer of the nil rate band against the estate of the survivor.
However these decisions must not be taken lightly and require careful consideration.
No appointment of any kind should be executed within the first three months after death for the following reasons: oIf the assets are appointed to the surviving spouse after a period of three months but before two years of death, the provisions of the Inheritance Taxes Act 1984 treat the appointment as having taken place under the Will.
That is why spouse exemption is then available.
oHowever if this appointment is executed within three months the provisions stated above are not invoked and there is no availability for spouse exemption and therefore no nil rate band available to transfer or utilise.
Finally, any changes to IHT do overshadow other some other reasons that are equally as important and valid.
These decisions need to be taken having considered the circumstances of the survivor and any assets that may have been compromised in the estate.
If the survivor in question was of ill health and this is sufficient to require increased home care (i.
e.
home nurse), there will be some very viable attractions to consolidating the structure of the trust for the sake of asset preservation.
Similar to this method there may be some assets that quality for Business Property Relief or Agricultural Property Relief.
This is also the case for any assets that are likely to increase significantly in any value.
Any of these scenarios would require the structure of the trust remaining the same to help maintain the status of the assets.