The IHT rules extension

IHT

Neil MacGillivray of James Hay & The IPS Partnership explains what the recent extension of inheritance tax rules means for investors

Since 22 March 2006 the inheritance tax (IHT) rules for discretionary trusts were extended to include lifetime gifts to all trusts with the exception of bare trusts and trusts for the disabled. The downside of this is gifts of assets into a trust by an individual, known as the settlor, could be subject to IHT entry, periodic and exit charges. This has meant most gifts made currently to trusts are restricted to the nil-rate band, currently £325,000, to avoid the entry charge. But on the upside the interaction between IHT and capital gains tax (CGT) does also create opportunities and co...