Inheritance tax rules have been tightened this week to prevent homeowners from avoiding the tax by disposing of their assets before they die. Under the ?pre-owned asset? regulations, homeowners will no longer be able to avoid paying the taxman by disposing of part of their property before they die while continuing to live in it. Taxpayers will have a choice either to take the asset back into their estate, on which inheritance tax will be payable at 40% of the value over £263,000, or they will be able to pay an income tax on the asset at 5% of the value. Previously, the ?gifts with reservation? tax had meant that a property could not be given to an inheritor as a gift in order to avoid the tax. But many people continued to avoid paying by giving away a portion of the property. The new regulations have closed this loophole. Another avoidance technique used by many homeowners is to invest in specialist ?double trust? schemes. They now fear that the new regulations could incur a double tax hit due to the complex timings of the schemes. However the Inland Revenue confirmed yesterday that the regulations will eliminate the double charge and that only one inheritance tax charge will be due whatever the timing of the estate owner?s death. The new regulations are due to come into force on April 6.
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Luke Edward Hall’s consuming passions: ‘I like listening to ambient electronic music, particularly dungeon synth’The artist, designer and author reveals why Cecil Beaton is his aesthetic hero and his plans for a new Cornish home (theme: ‘pirate baroque’).
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Hampnett House: A Gloucestershire garden where an empty, squelchy lawn has been replaced by 'gorgeous flowery generosity'What to do if you inherit a garden that isn’t your style? Tiffany Daneff visits the garden at Hampnett House, Gloucestershire — home of Mr Sanjeev Shah and Ms Mansi Amin — and finds a space that has undergone a major transformation, from high-concept minimalism to flower-filled paradise. Photographs by Britt Willoughby Dyer.
