Inheritance Tax: Save £100,000s with simple advanced planning Article Discussion

schiff

I have devised a plan to reduce some of the IHT I will be liable to - I can't avoid it all. The details don't matter for the purpose of this enquiry.

The plan has been put to my accountant, my financial adviser and my solicitor. They don't all agree it will work - two do, one doesn't.

I don't want to run foul of HMRC and would rather abandon the idea than have it thrown out by HMRC after going to the expense of setting it all up.

What I would like to do is to present the fully detailed plan to HMRC and ask for clearance before I go any further. Is this possible? It seems to make sense but I don't know if the facility exists.

Savvy_Sue

schiff wrote: »

What I would like to do is to present the fully detailed plan to HMRC and ask for clearance before I go any further. Is this possible? It seems to make sense but I don't know if the facility exists.

I am not sure, but ...

schiff wrote: »

I don't want to run foul of HMRC and would rather abandon the idea than have it thrown out by HMRC after going to the expense of setting it all up.

you do realise a) that you'll be past caring by the time anyone finds out that it's going to be thrown out by HMRC? and b) even if it is OK by them at the moment, if too many people have the same idea the rules may be changed? and c) the rules / limits on IHT may change, wasn't it one of the Tory pledges in their manifesto?

schiff

Thank you for that!

b) and c) are obvious possibilities but is it naive to believe that if HMRC have OK'd something (if it is possible to get a ruling) they wouldn't invoke any more modern rules to go back on it?

I know there is a continual ongoing battle between experts finding loopholes and HMRC closing them!

HMRC must surely have a team in place watching over the matter of IHT, it's a question of finding and contacting them.

Keep_pedalling

I don't think it is part of HMRCs remit to advise the public on the best way to avoid tax, which is why specialist tax advisors exist, and if none of the people you have run this past are IHT specialists then what they think of your plan is highly suspect.

My plan to minimise IHT is to try and be as generous as I can and live as long as I can, it's simple and involves no fees for expensive tax planners. As it stands my estate will still have some to pay unless I have to raid the long term care home fund. I really hope I don't need to use that so in a funny way I hope there will be some to pay.

getmore4less

So few peoples estates are subject to IHT it is easy enough for them to decide which administrators to investigate.

Which one of the 3 says no?

Outline it here for any obvious flaws.

getmore4less

Does anyone know if they have closed the obvious loophole marrying someone to gain their nil rate band?

schiff

getmore4less wrote: »

So few peoples estates are subject to IHT it is easy enough for them to decide which administrators to investigate.

Which one of the 3 says no?

Outline it here for any obvious flaws.

I'm asking this on behalf of my son-in-law, who asked me about it last night (I used to work in the Inland Revenue). It's the solicitor I think but I know no more detail than that. A meeting has been arranged with him and the three advisers present, hopefully to try and sort it out. I can imagine that being fun!

Savvy_Sue

schiff wrote: »

is it naive to believe that if HMRC have OK'd something (if it is possible to get a ruling) they wouldn't invoke any more modern rules to go back on it?

AFAIK the rules in force at the time of death are the ones which will apply - how else could it be?

For example, the possibility of passing of the the IHT allowance from one spouse to the other is something which has happened in my lifetime. Many older people (including my parents) wrote their wills earlier than that, making the best they could of the rules in force at the time they wrote their wills. When we recently made ours, we did it differently. We can only work with what we know, impossible to predict how things may change.

SeniorSam

Having had conversations with the Revenue before, I can assure you that HMRC will not simply approve a scheme, they will say that they will look at it when the time comes, which is always a bit annoying.

Having specialised in some rather complex plans over a number of years before my retirement, there have been very few new plans that have been sanctioned following death.

The complexities of some Trust schemes have been accepted and used with careful investment planning, but I would very much doubt that you have discovered something new.

If the solicitor in question is a STEP qualified solicitor, then he will probably know more than the financial advisers, unless they are specialists in this field.

If you could outline the basics of your plan, it would be easier to comment further.

Sam

schiff

All the information you have provided is and will be very useful and of course it makes sense about the possible rule changes etc. The information will be passed on and we will see what happens at the meeting which I think is in June.

Thank you all