The recent Budget announced by The Chancellor contained no new changes to Inheritance Tax. It only confirmed that there would be no increases in the tax free allowance of £325k per person until after 2017.
This is a far cry from David Cameron’s original pledge when he took office that he intended to raise the allowance to £1m per person.
Once again then it is vital to plan your affairs by the use of a Will,the creation of a Trust and the granting of a Power of Attorney in order to take advantage of all the opportunities to reduce the potential liability to the tax.
A Will can be constructed so as not to leave everything direct to a spouse/partner which would only aggravate their liability to the tax. An Asset Protection Trust in a Will with children as beneficiaries could solve such a problem
A Property Protection Trust in a Will can also prevent potential liabilities for the surviving partner.
A Power of Attorney is a very useful tool to enable loved ones access to the donors assets if the donor becomes unable to manage those assets themselves.