Inheritance Tax

The executors of a woman have discovered that a repayment will be made to the estate because the deceased’s former home was in the wrong council tax band

More information from the latest edition of the HMRC trusts & states newsletter

New IHT forms for Scottish estates have been published

Bowring and another (TC2766)

An offshore trust has undistributed income and stockpiled gains. If the trustees create a new trust out of the original trust assets, how are the income and gains apportioned?

The August edition of the HMRC trusts and estates newsletter has been published:

Inheritance tax treatment of compensation payments

HMRC Trusts and Estates have confirmed the treatment of compensation payments for inheritance tax purposes on the basis it can cause some difficulties for taxpayers and their agents, especially when compensation is received after the date of death.

The life tenant of a trust created by his late wife’s will is a higher-rate taxpayer and wishes to assign the income to his new wife, a basic-rate taxpayer

The inheritance tax revamp for non-domiciled spouses explained

A taxpayer died seven years ago and the estate, which was just below the inheritance tax threshold, has long been wound up. It seems a claim could be made in respect of an individual savings account and this might yield about £6,000. What are the inheritance tax implications if compensation is now paid?

An interest in possession trust was established by a will and allowed a widow to occupy a property as her main residence for her lifetime. She is now elderly and has moved into a care home. The property has been sold and the proceeds have been invested

There are special rules for allocating the income arising from property held jointly by spouses or civil partners and this may cause confusion

The inheritance tax (IHT) exempt amount a UK-domiciled individual can transfer to a non-domiciled spouse or civil partner is to be increased.

There is currently a lifetime limit of £55,000 on the value of the assets that can be transferred free of IHT when the spouse or civil partner to whom the assets are transferred does not have a UK domicile.

New rules to be introduced in Finance Bill 2013 will raise the cap to the level of the prevailing nil-rate band.

By Withers LLP, Aparna Nathan and Marika Lemos; £275; sixth edition; hardback; Sweet & Maxwell