ESTATE PLANNING
 Financial planning is an important element of estate planning as it should help clients maximise their wealth by the appropriate choice of investments.
 Make full use of available exemptions and reliefs during the individual's lifetime.
 Any transfers of value within the NRB are effectively tax-free.
 Outright transfers in excess of the NRB will only be taxable if the donor dies within seven years of the transfer and even then, only the part exceeding the NRB is taxable.
 Transfers to a trust will be chargeable, but only at the lifetime rate of 20% insofar as they exceed the NRB. The higher death rate will be payable if the donor dies within seven years of the transfer.
 Moral: make transfers sooner rather than later.
 Transfer of assets may also be subject to CGT, but holdover relief may be available where the assets are business assets.
Who should property be given to?
 Equalisation of estates still a sensible course of action - provides financial security for surviving spouse and greater scope for tax planning
 Ownership of the matrimonial home - co-ownership is usually better;
ownership as beneficial tenants in common may provide more scope for tax planning but may have practical problems
 Consider impact of other taxes i.e. income tax and CGT
 Income tax - try to maximise use of each spouse's lower rate tax bands
Spouse/Civil Partner  CGT - transfer between spouses at consideration which gives no gain and no loss; can be sensible to make a preliminary transfer between spouses so that each can make a lifetime gift and utilise exemptions.
 Consider the availability of reliefs, e.g. one spouse may qualify for BPR
but not the other, so would not be sensible to transfer such an asset to the non-qualifying spouse - better to leave such assets to children by will.
 Any unused NRB will transfer to the surviving spouse on the other's death
 Consider availability of exemptions and reliefs e.g. annual exemption, and use of NRB
 Possible charge to CGT subject to availability of holdover
Outright
Gift relief for business assets
 s.629 ITTOIA 2005: gifts to minors - income over £100 treated as income of parent and not child
 Tax implications of transfers into trust
Children and
 Will usually be a LCT for IHT purposes and the income
Remoter Issue
Gift in deeming provisions mentioned above apply to trusts set
Trust up for minor children (s.20 ITTOIA 2005)
 BEWARE THE RESERVATION OF BENEFIT RULES!
 In practice, often the only practicable measure in smaller
Gifts by estates
Will
 Availability of exemptions and reliefs should still be considered as should effective use of the NRB
 Always consider as a tax efficient method of reducing the assets in the estate
Charity
 Availability of charity exemption for IHT: lower rate of 36% IHT if >10%
of estate given to charity

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