Pre-Owned Assets Income Tax and Estate Planning

The new 3rd edition takes into account the changes in 2006 and 2007 affecting foreign domiciliaries, reverter to settlor and new arrangements involving the family home and chattels. It also covers the new options for Inheritance Tax planning following the 2006 changes to Inheritance Tax and Pre-owned Assets Tax. -Explains the law relating to pre-owned assets tax and how it works in practice -Shows what mitigation strategies can be implemented on portfolios already containing IHT avoidance plans and how to deal with old schemes in the light of recent develop -Shows what strategies to use now to avoid POAT and reservation of benefit on future arrangements -Considers in particular the family home and chattels -Includes planning strategies, examples and precedents -Analyses the Pre-Owned Assets Tax problems for foreign domiciliaries resident in the UK -Uses diagrams, flowcharts, worked examples and calculations to describe situations Table of contents: PART 1: SETTING THE SCENE Introduction IHT and reservation of benefit PART 2: HOW THE LEGISLATION WORKS The para. 3 charge on land The para. 6 charge on chattels Excluded transactions Intangible property comprised in a settler-interested settlement: para .8 Main exemptions under the regime Territorial scope £5,000 annual exemption; de minimis and motive Avoidance of double charges Opt out elections into reservation of benefit Regulations Administration PART 3: PLANNING IN PRACTICE: REACTIVE PLANNING Ingram schemes Reversionary leases Eversden schemes Home loan arrangements Chattel Arrangements Insurance arrangements Foreign domiciliaries PART 4: PLANNING IN PRACTICE: PROACTIVE PLANNING Regime implications for tax planning generally Co-ownership arrangements Reverter to settler trusts Trust reorganisations Cash gifts Selling the family home – planning options Businesses and farms Will drafting APPENDIX I: THE LEGISLATION FA 1986, s.102, 102A–C; 103; Sch.20 (as amended). FA 2004, Sch.15. The Inheritance Tax (Double Charges Relief) Regulations 1987 (SI 1987/1130). Charge to Income Tax by Reference to Enjoyment of Property Previously Owned Regulations 2005 (SI 2005/724) APPENDIX II: MATERIAL ISSUED BY HMRC Written Ministerial Statements of 7 and 8 March 2005 (dealing with the content of the Regulations) IHT 500 plus notes for completion (GWR election) Income Tax and Pre-Owned Assets Guidance (including Questions and Answers) Miscellaneous correspondence SDLT and nil rate band discretionary trusts APPENDIX III: MISCELLANEOUS TECHNICAL ISSUES The Scope of the artificial debt rule in FA 1986 s103 The distinction between a "gift" and a "transfer of value"