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POST-BUDGET 2008 COMMENT

brief caseNo news is good news ...

No news is good news for IHT mitigation.

I am delighted that there appear to be no further attacks in the Budget on gifts into trust.

In fact, quite the reverse in that the Chancellor has extended the transitional period for changes to pre-March 2006 trusts until 5th October.

Combined with other recent announcements and rulings this leaves us with clear messages:

  • Trust-based IHT plans can be used to genuinely reduce IHT liabilities.
  • A recent ruling by Special Commissioners legitimised both the principles of such schemes and the effectiveness of discounts for all ages.
  • The sooner each taxpayer starts the seven year clock the better – start today!
  • WAY now offers unit trust plans which combine discounts with flexible access.
  • With the tax regimes now favouring unit trusts over bonds the WAY plans remain market-leaders.
  • Older taxpayers with large ISA portfolios should consider protecting them from IHT.
  • Retrospective rules mean that plan transfers into trust from April 2007 and which are below the Nil Rate Band no longer have to be reported to HMRC.

All told, this represents a big green light to those taxpayers who, if they don’t get into action by utilising an effective mitigation strategy soonest, are likely to finish up unnecessarily paying IHT on their assets when they die.

So anybody with assets well in excess of the current allowances, particularly those entering their grey phase, should waste no time in taking avoiding action at the soonest opportunity.

The big deterrent to entering mitigation plans in the past has been the lack of flexible access to assets once they have been gifted. This is no longer a major problem since plans can now combine discounts and flexible access.

Paul Wilcox,
Chairman & Technical Director, WAY Group.
13th March February 2008.

Press Release Date: 13th March 2008.

Please Note: The above commentary first appeared online in What Investment. Reproduced with kind permission.

Note: This commentary 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 information is supplied to you in confidence and you may not pass it on to any other party without prior written consent. 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. 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 commentary. The commentary does not constitute investment advice or a recommendation to purchase or sell any security. Neither the author nor WAY Investment Services Ltd accept any liability whatsoever for any loss or damage arising in any way from any use of or reliance placed on the commentary. WAY Investment Services Ltd is an Appointed Representative of WAY Fund Managers Ltd which is authorised and regulated by the Financial Services Authority.

Press Release Date: 13th March 2008.