Inheritance Tax - Paid Before Death

14 August 2014

Changes currently being considered by the Government could mean savers suspected of avoiding inheritance tax will have to pay while they are still alive.

There are many tax avoidance schemes, and the drive by HM Revenue & Customs (HMRC) is towards wealthy individuals who seek to dramatically reduce the amount they are taxed. With the proposed new powers, HMRC would be able to apply ‘accelerated payment’ laws to anyone suspected of using such schemes.

According to HMRC, many more people are using trusts to hold property, financial assets and insurance policies. When held in a trust the assets are effectively not included in their owners’ estates, therefore tax does not apply. The new powers would only apply to trusts which HMRC suspects of being set up specifically to avoid tax, and an investigation would ensue.

An HMRC spokesperson said: ‘The proposals in the consultation paper will only affect a small minority of wealthy individuals who actively seek to avoid inheritance tax. Couples would still be able to leave up to £650,000 tax free to benefit their children or grandchildren’.

Should wish to review your own situation in terms of tax and estate planning please contact our tax specialist, Shane O’Dowd, at our Lurgan office on (028) 3832 4924 or by e-mail at shane@dalypark.com .