W7 - Tax planning

Liability for tax payable on lifetime transfers rests with the _

Transferee

Liability for tax payable on death estate rests with the __

PRs

Can you convert a life interest police to one WIT?

(Benefits?)

Yes! Benefits = outside SE + taxable estate

Consideration re nominating pension to someone - older spouse or children?

Maybe best for chidlren i.e. if spouse also trying to reduce assets/ IHT liability

Are remainder interests inside / outside the taxable estate?

But if i.e. mother is the life tenant then the value of the trust fund on…. Would be …

& the tax bill would be …

OUTSIDE = dont actually have it yet! (It is w the life interest person)

On the date of mother’s death, would be included in the mother’s taxable estate! (Added to their own personal estate)

Apportioned betw trust fund and life tenant’s personal estate!

Exception when there will be a limit on transfers between spouses? + what is this?

Where one is no UK domiciled/ a long term UK resident - up to £325k exempt + anything above this = a PET!

Would property investment co ltd shares qualify for BPR?

No - BPR is for trading businesses

Is the value of an ISA Part of your IHT Taxable estate?

Yes

Do you have to have a controlling shares in a private company for relief?

No, only if listed?

Can you apply family maintenance to children? When cant you?

Not if child is over 18 and not in full time education

What if you give regular payments of income to someone?

If regular pattern → could qualify for normal expenditure relief.

What if person leaves ££ into trust, to his family and he is also a beneficiary? Taxable?

What if he doesnt actually get a benefit from the trust?

What if survive over 7 years since making it?

= a settlor-interested trust/ GROB

→ he retains a benefit

Doesn’t matter → enough that there is a potential to! = Still included in taxable estate at value of death.

Immaterial

What if want tax efficient way to leave estate, but concerned wife will spend all money. Not leave enough for children?

What does wife get? What does wife not get? (But power can be given to…)

Life interest trust with wife as life tenant, + children as remainder people

→ spousal exemption applies, no IHT

She has an interest in the income. No interest in capital! (But power can be given to provide this if needed!)

IS family maintenance exemption available upon death?

No - only available for lifetime!

What if solicitor takes instructions for will and unreasonably delays drafting it + intended beneficiaires annoyed?

Solicitors owe DOC to potential/intended bens/ estate - the ‘would be beneficiaires’ - can sue

If will rational and duly executed - there is a presumption that…

Unless there is… - who has burden here?

Then Who has burden to prove testator had TC?

Have testamentary capacity

Unless there is evidence that raises doubt (Evidential burden to knock down the presumption = person arguing against it)

The executors!