Another stop on the gravy train

Feb 8, 2008, 05:18 AM

Authors : Richard

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Post date : Feb 8, 2008, 05:18 AM

I see that Mr and Mrs Nicholas Winterton – both MPs – have partaken of some basic tax planning in combination with their MPs’ expense allowance.
Their action appears to have the main hallmark of a good plan – simplicity!
They had a house on which they were paying a mortgage.
They paid off the mortgage using the proceeds of a life assurance policy and a small legacy.
They transferred the property into a trust.
They rent the property back from the trust using their MPs’ housing expenses.
They save themselves inheritance tax.
I suppose the icing on the cake (or should that be the gravy on the pie) would be if the trust had taken out a loan on the property, the interest on which could be deducted from the rent for tax purposes.
State-sponsored tax planning anyone?
And they wonder why people are losing faith in the tax system.

To keep the faith and return to Taxation.co.uk, click here.

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