Trust rules

This article looks at the tax consequences of making an appointment, or changing an individual’s interest or entitlement, under a pre-22 March 2006 trust.

This article is intended to assist financial advisers in completing the IHT100 Forms following the declaration of a Skandia/Royal Skandia Discounted Gift Trust (Discretionary version) or Skandia/Royal Skandia Discretionary Trust (Settlor excluded and Settlor included versions).

This article is a summary of some of the features of the Skandia Absolute and Discretionary (Settlor excluded) Trusts. It is not intended to be exhaustive and should be read in conjunction with Skandia’s other technical material available here.

In the following article, references to the current UK tax rates mean rates in the tax year ending on 5 April 2011 (tax year 2010/2011).

This article outlines why it is important to establish the full gifting history of a settlor when advising clients on inheritance tax (IHT).

This article summaries the judgement provided by the Court of Justice of the European Union (ECJ) regarding gender discrimination in relation to insurance premiums and its effect on Discounted Gift Trusts (DGT).

Inheritance Tax

This article outlines the Pre-owned assets tax rules relating to intangible property and in particular offshore bonds. Pre-owned assets tax was introduced to impose an income tax charge where UK resident taxpayers successfully circumvent the gift with reservation of benefit rules for UK inheritance tax.

The legislation surrounding trusts (Schedule 20 Finance Act 2006) means it is essential to consider the order in which gifts into trusts are made when advising your clients on inheritance tax (IHT) solutions. The order in which gifts are made will dictate the future taxes applicable to the trusts created, as the following example demonstrates.

Following the Finance Act 2006, advisers are looking to maximise all avenues to reduce the impact of the changes introduced, especially those relating to inheritance tax (IHT).

Following the changes to IHT on 22 March 2006, HM Revenue & Customs (HMRC) stated that new reporting thresholds would be introduced. The regulations on ‘Inheritance Tax (Delivery of Accounts) (Excepted Transfers and Excepted Terminations)’ were laid before Parliament on 6 March 2008 and came into force on 6 April 2008 and applies for the 2007/08 tax year onwards.

The Finance Act 2006 made changes to the inheritance tax (IHT) treatment of interest in possession (IIP) trusts and accumulation and maintenance (A&M) trusts.

There are a multitude of different types of registered pension scheme and a great degree of flexibility that can be exercised by the scheme member over the timing and form of benefits that can be taken. Consequently, this can make the interaction with inheritance tax a little complicated.

Income Tax

This article addresses the taxation position of trustees and beneficiaries in receipt of dividend income and savings income generated from trust assets. It does not consider all scenarios and Skandia recommends that independent tax advice be sought in all cases.

This article looks at the income tax treatment of trusts created by an individual, when their unmarried minor children are beneficiaries of the trust.

This article provides a high-level summary of who is liable to tax when an asset is held in a trust.

This article highlights a series of planning opportunities which can be implemented up to tax year end and beyond.

This article looks at the main Qualifying Policy rules and conditions that must be met in order to retain the tax advantages associated with qualifying policies.

Phil Carroll takes a look at income planning within your clients’ tax wrappers.

The Budget on 21 March 2012 introduced important changes to tax rules around qualifying policies. Here is a summary of the changes and how they affect new and existing policies.

This article covers the tax treatment of trail commission and fund rebates following HMRC clarifying their position.

Capital Gains Tax

Phil Carroll considers the pertinent tax planning considerations at tax-year end in preparation for 2010/11.

This article sets out the rules relating to capital gains tax (CGT) and some of the major planning considerations.

Phil Carroll explores Capital Gains Tax post emergency budget 2010.

When considering disposing of assets, you need to be aware of the clients complete fund holdings rather than just the holding they may wish to sell. Holding a fund direct as well as via a collective such as Skandia's Collective Investment Account may mean the gain or loss realised is more or less than expected. Although the introduction of Section 104 holdings simplified the old rules it does have the impact of dragging older gains into charge quicker.

This article looks at how equalisation operates and why it is important when calculating Capital Gains Tax (CGT) for collectives.

Final draft legislation was published on the 31 January 2013 entitled 'The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Merges and Schemes of Reconstuction) Regulations 2013' and is yet to be laid before parliament. It confirms that regardless of the mechanism for an exchange of units (i.e. either conversion or a switch) providing the exchange meets the conditions in section 103F then no capital gains tax event will apply. While this is obviously good news, on a practical level there is still some outstanding clarification required regarding equalisation.

Budget

A high-level summary of some of the key aspects for financial advisers from the emergency Budget Report on 22 June 2010.

The following article summarises the key areas identified from today’s Budget that are likely to affect UK financial advisers and their clients.

Budget announcements of main rates and allowances for the tax year 2012-13.

The following article summarises the key areas identified from today’s Budget that are likely to affect UK financial advisers and their clients.

Adrian Walker looks at the outcomes for retirement planning from the Budget 2012.

The following article summarises the key areas identified from the Chancellor’s Autumn Statement that are likely to affect UK financial advisers and their clients.

Phil Carroll takes a look at whether the Chancellor’s Autumn Statement has any effect on tax-year end planning.

The UK Budget took place on 20 March 2013. A summary of the changes relevant to advisers and their clients are detailed below.

Rachael Griffin analyses the highlights… if you can call them that.