David was instructed to prepare a Will for an extremely wealthy gentleman, a member of a family with a household name. The testator wanted to leave his multi-million pound estate to various family members, and in the initial instructions set aside a percentage on discretionary trusts, which included a family charity of which the testator was particularly keen to benefit.
A week or so later David went to visit the client and suggested that rather than include the charity within a discretionary trust, that there should be a direct gift to the charity. The testator readily agreed upon learning that this would save a minimum of £800,000 in inheritance tax.
David was instructed by a long standing friend/client/accountant, who was terminally ill with cancer. The client and his wife held an investment property in Oxfordshire which they had acquired many years ago. The property was heavily pregnant with capital gains David advised his client that on this death, the gains on his share of the property would be written off for tax purposes. It was understood that, on the death of his client, the widow would want to sell the house. Capital gains would be an issue on her share.
David’s advice to his client was that his widow should transfer to him her share of the property. As between husband and wife there was no gains, and so the client would take his wife’s share of the investment property at her base cost. There was no question of inheritance tax because of surviving spouse exemption.
On the death of David’s client, the investment property passed to the widow free of capital gains tax and inheritance tax, and was subsequently sold.
David acts for an elderly gentleman who was the only shareholder of a trading company which was to be sold for £50 million. David’s advice to the client was to settle one half of the shares in the company, subject to business property relief, into a family trust. The timing was delicate, because for inheritance tax purposes it was not possible to transfer the shares once the binding contract had been agreed. On the other hand, if the company were not then to be sold, and a number of buyers were lined up, then David’s client did not want to put half of the company into trust.
Some delicate negotiations followed as a consequence of which half of the company shares were transferred to a family trust, of which David continues as a Trustee, and business property relief of 100% was obtained.
Happily the client has so far survived for more than 5 years, and so any liability to inheritance tax is rapidly decreasing. As a consequence the family enjoy the benefits of a very significant trust indeed and, with a fair wind, inheritance tax will not be an issue.