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Your next steps: contact us to discuss…
•
Making the most of allowances and reliefs
•
Ensuring that your tax liability is kept to a minimum
within the law
•
Using savings, capital and other vehicles to give
your children a better start in life
•
Writing a Will
•
Life insurance and obtaining disability and critical
illness insurance
•
Tax-efficient savings and investments
Generation skipping
If your child is grown up and financially secure, it may be
worth ‘skipping’ a generation as income from capital gifted by
grandparents or more remote relatives will usually be taxed as
the child’s, as will income distributions from a trust funded by
such capital.
Marriage breakdown
Maintenance payments do not usually qualify for tax relief. The
special CGT and IHT treatment for transfers between spouses
applies throughout the tax year in which separation occurs.
For CGT, transfers in subsequent years are dealt with under
the rules for disposals between connected persons, with the
disposal treated as a sale at market value, which could result in
substantial chargeable gains. For IHT, transfers remain exempt
until the decree absolute. Timing is crucial; we can assist you.
A contingency plan
Contingency planning could help to protect your family if you
die or become incapacitated. This might include taking out
adequate insurance cover, perhaps with life assurance written
into trust to ensure quick access to funds. It is also essential
to make a Will. We also strongly recommend that you and
your spouse:
•
Make a living Will (also called ‘advance decisions’):
so
that your wishes are clear with regard to medical treatment
in the event that, for example, you were seriously injured
following an accident
•
Execute a lasting power of attorney:
so that if you
become unable to manage your affairs, as a result of an
accident or illness, responsibility will pass to a person of
your choosing.
Remember to tell your spouse, your parents, and your business
partners where your Will and related documents are kept. If you
are passing on responsibility for managing your affairs, it might
be advisable to talk matters through with them.
Unclaimed assets?
Billions of pounds of assets lie unclaimed in the UK! To see if
you have lost assets contact the Unclaimed Assets Register on
0333 000 0182 or visi
t w ww.uar.co.uk(NB: a charge applies
for this service). To find out if you have an unclaimed Premium
Bond prize, call 08085 007 007 or visi
t www.nsandi.com.
Non-UK domiciles
A UK resident and domiciled individual is taxed on worldwide
income and gains. Non-UK domiciles who are UK resident can
claim the remittance basis of taxation in respect of foreign
income and gains with the effect that they are only taxed if
foreign income and gains are brought into the UK. The non-UK
domicile is also favourably treated for IHT as they only pay IHT
in respect of UK assets as opposed to their worldwide assets.
However, an individual who has been resident for at least 15
of the last 20 tax years will be deemed UK domiciled for all tax
purposes. In addition, those who had a UK domicile at the date
of their birth will revert to having a UK domicile for tax purposes
whenever they are resident in the UK, even if under general law
they have acquired a domicile in another country.
Checklist: Financial protection
strategies
Self
✓
Spouse
✓
Essential:
Will
Living Will
Lasting power of attorney
Life assurance
Keep papers in a safe place – and make
sure other people know where they are!
Seriously consider:
Income, mortgage and loan protection
insurance
Tax-efficient estate planning
Planning for the transfer of your
business
Funeral arrangements and expenses
A tax-efficient gift strategy