Related Personal Tax Advice News

  • Substantial Estate
    A terminally ill client came to see us in order to discuss his (very large) estate. As he was not expected to live for more than a year it was not thought to be possible to make gifts of his estate to his family in his lifetime (generally speaking, gifts made within 7 years of death are taken into account by HM Revenue and Customs when calculating the value of the deceased’s estate).


    The client was keen to provide for his children from his first marriage but also wanted to ensure that his second wife (who was in her thirties and in good health) was provided for.


    The client left £325,000 to his children (which is currently the most that any individual can leave without incurring an inheritance tax charge), a cash sum of £200,000 to his wife and the remainder (almost £2 million) on trust for his wife for her lifetime on the basis that she would only be entitled to the income from the trust fund and to live in the house rent-free for the rest. 
  • Inheritance and Capital Gains 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.
  • Family Trust
    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.