| Since 2007 over 600,000 estates have been subject | | | | not be responsible for the gift or the relationship could |
| to a large decline in asset values due to the fall in | | | | deteriorate. |
| property in property markets and their associated | | | | Despite the potential perks of this system, there is also |
| equities. This has resulted in almost £1 billion | | | | the system of family partnerships that can give the |
| being erased from any potential inheritances according | | | | benefits of the financial security but without the |
| to a leading Hampshire solicitor. | | | | potential loss of control over the asset. |
| While some clientele may decide to hold on to these | | | | The family partnership works on the basis that older |
| assets until the market conditions improve before | | | | family members/asset holders form a partnership and |
| making decisions about their estate, they could actually | | | | gift interest of the partnership to younger family |
| benefit from significant tax savings by making the | | | | members/beneficiaries. Under the terms of the |
| necessary arrangements now and utilise the | | | | agreement the receivers are not entitled to access the |
| depressed asset values according to a leading wills | | | | money until a specified age. The agreement also |
| solicitor. | | | | allows for permitted persons to exclude a certain |
| One of the traditional ways of saving valuable assets | | | | person depending on their age or if they are not a |
| from 40% Inheritance Tax is by gifting them to in the | | | | member of the immediate family. |
| recipient through family trusts and provided they | | | | The initial transfer of the partnership does not incur a |
| survive for seven years after the gift is given. It is also | | | | fee if the amount is over £325,000 and is more |
| possible to defer any Capital Gains Tax which would | | | | suitable for the high value cases. The seven year |
| occur on the disposal. | | | | period of survival is still applicable. |
| Wealthier clients who also want to give a gift of more | | | | Unlike lifetime trust structures, there is also no ongoing |
| than the maximum amount (£325,000), a | | | | periodic charge to IHT. However, trusts do provide |
| transfer to a lifetime trust may result in a immediate | | | | greater flexibility and remain more suitable for making |
| charge to IHT due to the finance act in 2006. In addition | | | | provision for minors. |
| to this one off charge there is a periodic charge to IHT | | | | To summarise now is the prime time to plan for your |
| on the underlying capital value of the assets. Once the | | | | future and to decide on the best method of how you |
| gift is given the donor also relinquishes control over the | | | | intend to maximise the amount given to your loved |
| gift, which could concern the giver if the receiver may | | | | ones. |