Last month we reported on the proposed inheritance
tax (IHT) changes for trusts. The professional
bodies have been lobbying HMRC and the government
to reconsider the rules and appear to have
had some success. The legislation is being
amended on its way through parliament.
In particular, the proposals now seem to
suggest that if a child becomes absolutely
entitled to assets at the age of 25, rather
than 18, then IHT charges may only arise
for the seven years post age 18. These changes
apply in certain circumstances to existing
Accumulation and Maintenance trusts and new
trusts for bereaved minors.
Again, as we advised last month, if you
have a trust created before Budget Day, there
is no need to take any immediate action as
the IHT charges will not generally take effect
until 2008. However, you may wish to revisit
Wills to see if the provisions in existing
Wills are still appropriate.
Internet link:
Telegraph article
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