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Is this a good time for inheritance tax planning in advance of the Emergency Budget?

With the threat of possible rises in capital gains tax and the current depressed state of the economy, looking on the bright side, this is probably a very good time to consider passing assets with a view to inheritance tax planning.

Gifts of investments such as shares to children, or even grandchildren, can be effected now probably at a low value and consequently a relatively low capital gains tax cost. The gift is likely to be a potentially exempt transfer for inheritance tax purposes (provided this is outright) and so will stay 'on the clock' for a seven year period. However, the lower the value, the lower the risk in the longer term.

This may be worth thinking about, while there is still time. Of course, if you think capital gains tax rates will not go up and that the value of the assets are likely to fall still further you may wish to wait a while!

We will be blogging on SME Plus Blog and Tax Plus Blog on Budget day.  If you do not already subscribe to our blogs click here for SME Plus Blog or here for Tax Plus Blog to ensure you get our comment and analysis as and when it happens. 

Cathy Corns is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Cathy you can call her on 01908 605552. 

 

 

Date: 11th June, 2010
Author: Cathy Corns

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