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Offline Scooby  
#1 Posted : 23 April 2015 12:30:57(UTC)
Scooby

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Anyone (experienced that is in trusts)

Could do with a few pointers please to the latest guidance or useful information about Settlements and the "principal charge" 10 year anniversary as I have one of these coming up to deal with.

Useful links and info all welcome as this seems like a great place to share such information for fellow practitioners...

Thx

Scooby
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Offline TaxGuru  
#2 Posted : 23 April 2015 12:33:37(UTC)
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Hi Scooby

There is an interesting articles on the Taxation website about the "10 year itch" that is a good place to start.

Hope that helps a bit...

TG
Offline ATA  
#3 Posted : 23 April 2015 12:37:57(UTC)
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Scooby

How's Shaggy loved that when I was a kid and still "do" lol

The article the TG refers to is handy the legislation link in it does not work though.

See this link for Section 66 IHT 1984 about the 10 year charge.

Hope that helps too...

ATA
Offline Tax  
#4 Posted : 23 April 2015 12:43:23(UTC)
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Scooby

Now the Government is consolidating a lot of departmental websites on to gov.uk HMRC's old links are now outdated.

Here is the link to the ".Gov.uk" pages about Trusts and Inheritance Tax

Hope that helps too..

Handy forum discussion threat for any specific issues to do with the 10 year charge I would say, "post away"... could be helpful

Tax
Offline Scooby  
#5 Posted : 23 April 2015 12:45:47(UTC)
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Thanks for the links all very handy!
Offline TaxAdvisor  
#6 Posted : 23 April 2015 12:48:41(UTC)
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Hey Scooby

Here is the link you will need to the IHT100 forms are now on Gov.uk

At the bottom of that page is the link to the IHT100d needs for the 10 year charge too.

Again hope that helps

TA
Offline Sally  
#7 Posted : 23 April 2015 13:08:35(UTC)
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Scooby

Remember that post 6 April 2014 the deadline for filing the IHT100 and IHT100d and paying any IHT due to HMRC is now both within 6 months of the chargeable event (10th anniversary).

Before 6 April 2014 there was 6 months to pay the tax and 1 year to file the IHT forms with HMRC.

BOTH are now six month deadlines 6 April 2014 onwards for the IHT100, IHT100d and payments of the tax due, if any.

Don't get caught out by the new shorter deadline for submission.

Sally
Offline Rob  
#8 Posted : 23 April 2015 13:37:08(UTC)
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All

Hey just seen this discussion mentioned on Twitter and I do have a question about husband and wife settlements.

Where Husband and Wife have each settled shares they each own in a company (that owns a rental property) ten years ago into a single joint trust (single trust deed that is where they are both settlors and trustees but not beneficiaries) and the 10 year charge is looming does the settlement use 1 IHT threshold (nil rate band) or 1 for each original joint settlor.

Or it is then treated as a single trust and the trustees only entitled to take into account a single IHT nil rate band (threshold)?

In other words are the husbands and the wifes settled funds treated as separate settlements even though there is a single trust deed.

The only information that might help clarify this is one the MetLife website which at bottom right of page three of their guide states:

Quote:
What is the position regarding the Discounted
Giftwhen there are joint Husband and Wife
Settlors?

Where there are two Donors (say husband and wife) they should
contribute equally to the Trust by, say, providing a cheque on a joint
bank account.
Where a husband and wife invest as joint Settlors using jointly
owned funds, each will be treated as making an investment of
50%of the total investment and each will be treated as a Settlor of
one Trust made up of that person’s discounted gift into the Trust.


They mention recent HMRC guidance on this point does anyone know where I can find the HMRC guidance?

Presumbly if this is correct on the tenth anniversary it should be treated for all intensive purposes are two separate trusts one for the husband and one for the wife, each using a separate threshold (IHT Nil rate band)?

Comments welcome on this point.

I think generally current practice to for each spouse to create a separate trust with its own trust deed to deal with the issue of "related trusts" but my understanding is that this is a protective measure to avoid any doubt.

Comments or help appreciated...

Rob

Offline Danny  
#9 Posted : 23 April 2015 13:59:43(UTC)
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Scooby, Rob

Rob on your Husband and Wife joint settlors point I found this too from Three Counties "a fairer way of calculating IHT on Trust"

Which might help. It seems that for trusts created after 6 June 2014 this point might be clearer?

Quote:
"Where a trust created by joint settlors, this will be treated as two distinct trusts for IHT purposes with each created by one of the joint settlors".


(When in the PDF link do Ctrl F and search the document for "joint") hope that helps.

Although it is unclear if this applies to pre 7 June 14 trusts for sure?

Regarding pre 7 June 14 trusts Three Counties comment:

Quote:
"This means that such trusts would retain the nil-rate band available to them under the current rules."


But don't expand on the "current" rules i.e. rules for pre-existing trusts.

Danny
Offline TaxGuru  
#10 Posted : 23 April 2015 14:15:58(UTC)
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Danny, Rob

If you are looking for the .Gov 6 June 2014 Consultation document here is the link "Inheritance tax: A fairer way of calculating trust charges"

The consultation concluded in August 2014 and the Government published its response on 10 December 2014 and the Government conclusions following the IHT consultation can be found here.

Gov.uk quote:

Quote:
"Legislation on the alignment of payment and filing dates and the treatment of retained income is included in Finance Bill 2014. This consultation focuses on changes to the way IHT trust charges are calculated and it also sets out proposals for the treatment of the nil-rate band where the settlor makes a number of settlements."


Again I hope this helps

TG

Edited by user 23 April 2015 14:17:43(UTC)  | Reason: small correction to typo

Offline TaxAdvisor  
#11 Posted : 23 April 2015 14:30:34(UTC)
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TG

The proposed changes that gov.uk say will be in the 2014 Finance Act have be postposed I believe until the 2015 Finance Bill but I am not sure if they are even in the 2015 Finance Bill so maybe even later!

TA
Offline TaxAdvisor  
#12 Posted : 23 April 2015 14:35:33(UTC)
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TG

Did a quick search and don't think the IHT changes that the Government has been consulting on are in the 2015 Finance Bill which mainly I think deals with issues for Armed Forces related issues.

Here is the link to the 2015 Finance Bill IHT issues

TA
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