Wills, Inheritance Tax and Capital Gains Tax: An Aide Memoire For Commercial and Agricultural Clients
1. WILLS AND LIFETIME TAX PLANNING
Have you made a Will? If so, is it up to date?
Does your Will maximise the very advantageous Business Property and Agricultural Property Reliefs including the opportunity to recycle the relief on the death of a surviving spouse (effectively increasing the maximum levels of business or agricultural property relief to 200%!) ?
Have you taken steps to minimise Inheritance Tax through lifetime planning?
2. STRUCTURING OWNERSHIP TO MAXIMISE TAX RELIEFS AND MINIMISE TAX!
Is your Business structured to ensure that your share of the Business and any freehold or leaseholdproperty used in it will qualify for 100% Business Property Relief?
Are your farming operations and occupation of any farmhouse properly structured to qualify for 100%Agricultural Property Relief?
Have you left your Business or Agricultural Property to people (or a trust) other than your spouse?
Have you reviewed the present ownership structure of your business in order to ensure that youqualify for the new Entrepreneurs' relief for Capital Gains Tax (Qualifying Gains of up to £1m taxed at 10% rather than the general rate of 18%). Could adjustments be made so that you, your spouse and perhaps children all have the opportunity to use Entrepreneurs' relief, which is limited to £1m of gains for any one individual? For a family of 2 parents and 3 adult children, a potential saving of £80,000 could, with the right structure, be extended to a saving of £400,000!
3. EXIT/SUCCESSION STRATEGIES
Does your Inheritance Tax Planning take account of any exit plans from your Business when Business Property Relief on business assets will be lost?
Do you have a succession plan in place for your business?
Are your appointed Executors the right people to carry on/wind up your business upon your death?
4. DEATH IN SERVICE/ PENSION/LIFE ASSURANCE
Have you made full use of lifetime trusts for any death in service or pension benefits to reduce your Inheritance Tax liability?
Has your life assurance been written in trust effectively to fall outside of your and your spouse's estate for Inheritance Tax purposes and so that it is payable immediately upon death without waiting for Probate?
IF YOU HAVE ANSWERED "NO" OR "DON'T KNOW" TO ANY OF THE ABOVE YOU NEED OUR SPECIALIST ADVICE
David Garfitt (York) or Andrew Fearn/David Wood (Lincoln) specialise in Will and Inheritance Tax Planning for Business and Agricultural Clients and will be happy to advise you.
YORK