The Budget and second Finance Bill may include some of the
measures announced by the previous government, but not included in
the Finance Act 2015. A key point of interest for legacy officers
is a possible review of deeds of variation, which received much
press scrutiny in the run up to the election.
The government also pledged to increase the IHT threshold on main
residences to £1 million, in the form of a £175,000
'family home allowance' per person (£350,000 per
couple). This would effectively allow parents who have assets worth
up to £1 million to pass these IHT free to the next
generation. This complex and controversial measure will undoubtedly
impact on the way in which wills are drafted in the future, in
particular nil rate band clauses.
It is also expected that the budget will remove the so-called
Frankland Trap, whereby if appointments are made out of a
discretionary will trust within 3 months of death, they are not
written back into the Will for IHT purposes. At present this
potentially leads to an inadvertent IHT charge for the unwary.
Going forward, executors/trustees will no longer have to wait for 3
months to expire to make such appointments.
Click here to see HMRC's latest
publication on current and future tax measures in 2015.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
