WAY Group Newsletter for Financial Advisers | March 2011

Inheritance Tax (IHT) - Budget 2011 roundup

Inheritance Tax (IHT) Budget 2011 roundup

- Charity donations encouraged
- No changes to basic rules
- No review of IHT legislation announced

As far as IHT and estate planning are concerned, this was a fairly uneventful Budget.

The only real point of note is the inclusion of a tax rate reduction for charity donations. The basic rules remain unchanged, with no mention of the proposed legislation review by the Office of Tax Simplification (OTS).

Please read on for the IHT headlines in more detail...

Charity donations
From 6 April 2012, the IHT standard death rate will be reduced from 40% to 36% when 10% or more of the net estate value is left to a registered charity. The saving will increase the charitable donations and will not increase the amount received by any beneficiary. We note that this change and the calculations to be used are currently open to individual interpretation, and look forward to further clarification when the legislation is passed later this year.

Basic rules
The nil rate band is still frozen until 2014/15, but will then increase in line with CPI each following year. The DOTAS (Disclosure of Tax Avoidance Schemes) regime will be extended to include IHT planning via trusts from 6 April this year. The regime will not apply to the WAY's current range of IHT mitigation plans, but would affect any new trust based plans that we introduce. We will of course provide as much information and assistance as we can when introducing any new plans that are subject to the DOTAS regime.

OTS review
Some expected an announcement regarding the Office of Tax Simplification (OTS)'s proposal that there should be a top down review of Inheritance Tax as a whole. This was not forthcoming in this Budget, but may still be announced at some point in the future. We believe that any changes would likely be made with the aim of raising more tax - the driver for change more practical than ideological. We will of course keep an eye on this proposal and inform you of any effect this would have on the WAY range and your clients' investments.
WAY has taken great care to ensure that our IHT mitigation plans are, and will remain, effective. We liaise with HMRC on all new plans, concepts and subsequent changes in relevant legislation to make certain that our plans are still innovative and, above all, useful in the current financial environment.

Mark Benson, TEP CertPFS,
Technichal Manager, WAY Investment Services Limited.
28th March 2011.

References:
Data & Statistics - Budget 2011 London: The Stationery Office HC 836

– Ends –

How to contact us

We hope you found this article informative and that some of the issues raised will prove useful for developing business with your clients? If you wish to discuss any matters arising from this article or, indeed, want to talk to us about any of WAY's products, then you are most welcome to call either Tony Lyons, IFA Support Manager, or Mark Benson TEP, Technical Manager , on head office telephone number: 01202 890895. Or, if you prefer, you can use the website: Contact Form to get in touch. We look forward to hearing from you.

WAY Group Newsletter for Financial Advisers | March 2011

Please Note:
This document has been prepared for Financial Intermediary Clients and Professional Associates of WAY Investment Services Ltd and is not intended for and must not be distributed to Private Investors. This document does not constitute investment advice or a recommendation to purchase or sell any security. The investments and services referred to in this document may not be suitable for every investor and if in doubt independent financial advice should be sought. No representation or warranty is given (express or implied) as to the accuracy, completeness or correctness of the information nor the opinions, interpretations and conclusions contained in this document. No liability is accepted whatsoever for any loss howsoever arising from any information in this document subject to the rules of the Financial Services Authority or the Financial Services and Markets Act 2000. Past performance is not necessarily a guide to future returns and changes in rates of exchange between currencies may cause the value of investments to rise or fall. Share prices, values and income can go down as well as up and investors may get back less than their initial investment. WAY Investment Services Ltd is an Appointed Representative of WAY Fund Managers Ltd which is authorised and regulated by the Financial Services Authority.