Inheritance Tax planning like a Cameron
Why it’s legal; how it works
Ever since Cameron set out his stall against the Brexit, revelations about his spending and finances – both professionally and personally – have been coming out thick and fast. What a coincidence.
Even the Sunday Times – which regularly publishes advice on how to avoid Inheritance Tax – has been eager to publish the ‘revelation’ that Cameron received a gift of £200,000 from his mother in 2011, enabling him to potentially avoid up to £80,000 in Inheritance Tax.
All of the coverage in the media might give the impression that Cameron has done something illegal, or at least highly dodgy. But, in fact, all the Cameron family have done is follow the legal and sound advice on IHT planning that hundreds of families in the UK follow every year.
So if you have an estate that might be liable for Inheritance Tax (and with rocketing house prices, more and more people do!), what can you legally do to minimise your exposure like the Camerons have done?
Latest rules on Inheritance Tax
Many people are vaguely aware that there have been recent changes to the Inheritance Tax threshold, but the internet is full of rumours and out of date information. For the most up to date Inheritance Tax advice, you can download JWALS free guide to The 7 Inheritance Tax Mistakes to Avoid.
Taper Relief, Lifetime Gifts and the 14 year rule
Hang on, you might be thinking – I’m pretty sure it’s a 7 year rule on Lifetime Gifts. As all the papers have explained in brief, should David Cameron’s mother live another two years (making it seven years since the gifts were made in 2011), then the estate will be completely exempt from the IHT on that £200k gift.
But do you know a Potentially Exempt Transfer from a Chargeable Lifetime Transfer; a Bare Trust from a Protective Trust? Do you know how you may accidentally trigger the ’14 Year Rule’?
Are you clear on the difference between a reduction in the amount of the gift taxed, and relief on the full tax due?
At any time, you can call my colleagues at Just Wills and Legal Services for a free consultation with one of our expert advisors, but in the meantime have a look at our previous post, The 7 Year Rule: Inheritance Tax and Lifetime Gifts.
For more information get in touch with us at Just Wills and Legal Services on 01342 477102 to book a free consultation.
This post is for general information only and does not constitute legal advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.
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