Taking Account

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Inheritance Tax planning that still works

November 2005

There have been a number of anti-avoidance provisions enacted in recent times that have stopped the benefits of a number of complicated inheritance tax planning schemes.

However the use of a Nil Rate Band Trust, as part of a properly executed will, is still a perfectly legal and workable tax planning tool.

Essentially the trust allows married couples (and, from the 5 December 2005, couples registered under the new Civil Partnership Act) to use up their individual exempt estate values for inheritance tax purposes. Presently the exempt estate value is set at £275,000. Without the use of this planning tool it is possible that on the first death up to £275,000 of exemption may be lost.

There are risks to be avoided which can be achieved by using a particular type of variant trust. If you would like more details of this scheme please call.

Hilton Sharp & Clarke