Breakdown of Trust
The ability to make a Will and make gifts to loved ones is something most of us take for granted. One of the most common reasons for doing these things is to reduce the Inheritance Tax (IHT) payable on our death.
In the 2015 Budget, George Osborne announced that, from 6 April 2017, certain new categories of non-UK-domiciled individuals will be deemed to be UK-domiciled for tax purposes. This will result in the loss of a significant tax planning opportunity for some couples who have non UK assets; are separating or contemplating divorce; and wish to make an offshore transfer between each other in a tax efficient fashion after the new rules take effect.
One of the themes of recent Governments has been a tightening of the rules for the taxation of individuals with international interests. We are likely to see this theme continue in 2016. In this blog, we set out five of the key developments on this topic.
In 2007, the Conservative Party made much of a party pledge in its manifesto to increase the Nil Rate Band for inheritance tax to £1m. In July 2015, having been elected to form a majority government they announced the introduction of a Residence Nil Rate Band (RNRB). Now that more of the detail has emerged in relation to this policy announcement, the reality does not match the expectations of many and some of the details are still unclear.
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