In helping you to plan for inheritance tax minimisation, it may be beneficial to consider your estate and trusts.
Trusts enable assets to be given away while still retaining some control over them. Income can be paid to different persons with the capital ultimately going to other persons.
The main types of trusts which are used for tax planning purposes are the following:
- Interest in possession trust: this type is one in which one or more of the beneficiaries has a right to receive the trust income or has the use and enjoyment of the trust fund.
- Discretionary trust: this type is one where the payment of any trust income is at the discretion of the trustees.
- Accumulation and maintenance trust: this type is a suitable vehicle where the beneficiaries are under the age of 25.
We can review your existing trusts with a view to ascertaining their current tax efficiency or review your circumstances and advise on the most efficient kind of trust to meet your requirements. We will also examine draft trust deeds to ensure that they achieve your needs and will result in the most beneficial tax advantages for you.
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A response to a freedom of information request has revealed that HM Revenue & Customs (HMRC) cancelled 270,000 late penalty notices in 2016.
However, this figure was dwarfed by the 610,000 cancellations in 2015 and the 400,000 cancellations in 2014.
The request was made by a partner in a ‘magic circle’ law firm, who was himself issued with a late penalty notice, despite having submitted his tax return in December, ahead of the 31 January deadline.
Despite having filed on time, when HMRC overturned the penalty in March this year, it nevertheless issued a letter, stating “if you file on time we won’t charge penalties”.
While HMRC revealed the number of late penalty notices that were cancelled over the three-year period, it did not disclose how many of these were the consequence of errors on the part of the Revenue, as opposed to the taxpayer having a reasonable excuse for late filing.
A spokesperson for HMRC said: “We don’t want penalties, we just want tax returns. Taxpayers with a reasonable excuse for filing late or who have been taken out of SA do not have to pay penalties. Taxpayers who file on time are not issued with penalties.”