Help_Please

Hi,

I have a large sum of money in an overseas bank account.

How can I bring it into the UK without facing additional tax on it?

Will it be subject to IHT?
How much can I have 'gifted' to family members? Who would be considered a family member?
If I want to use it as parrt of a house payment, can I have it come inot my UK account as a 'loan' from a family member?

Thanks

OllyK

Cash and carrier bags?

I don't know too much about all this, but if you pay your taxes in another country, are you not exempt from this?

Brendan Hughes

Give it to me. I'll bring it in.

OllyK

You better hope they are not based in Nigeria

RESSE

iTrader: (1)

Inheritance Tax:

Inheritance Tax was introduced on 18th March, 1986 and replaced Capital Transfer Tax. It is a tax which applies to nearly all transfers of capital made at or within 7 years of death and it is calculated on an accumulating basis.

Gifts made prior to but within 7 years of death are brought into charge at a tapered rate. Such gifts are taxed on the value at the date of gift using the death rate scale applicable to the date of death.

Tapering scale: years
between gift & death % of full charge at death rates
0 - 3 100
3 - 4 80
4 - 5 60
5 - 6 40
6 - 7 20

Lifetime gifts made into and out of trusts are taxed at one half of the death rates.

To take full advantage of the opportunities to reduce (or provide a fund to meet) this tax it is necessary to understand the principal exemptions. They are:-

(a) Transfers between husband and wife.
(b) Gifts up to £3,000 in any one year.
(c) Gifts up to £250 per beneficiary in any one year.
(d) Gifts which are part of one's normal expenditure out of income (after deduction of income tax) which leave sufficient to maintain one's normal standard of living.
(e) within certain limits - gifts in consideration of marriage and gifts to charities.

In addition, the first £275,000 (in current year) Code:30602130} of gifts outside the exemptions are taxed at a NIL rate.

For the purpose of calculating liability to Inheritance Tax certain Business and agricultural assets are deemed to be of less than their actual value.

Special tax avoidance rules apply to lifetime gifts where the donor reserves a benefit over or subsequently enjoys the benefit of the gifted property.

Estate planning objective:
*To reduce the eventual burden on your family of Inheritance Tax and, provided it can be done without imposing unacceptable financial pressures on yourselves, to set up a Family Trust, funded by a life assurance policy, which will not only provide funds for the payment of any Inheritance Tax you cannot avoid but could also provide long term financial support for * and/or your grandchildren without 'spoiling' them by giving them too much capital at too young an age.

Recommended action:
Your Wills:
*Ensure that your wills take advantage of current opportunities for tax minimisation. This is a matter on which you should consult your solicitor but please discuss it first with {Brief Company Name (in current year) Code:30000630}.

Use of Annual Exemptions:
*It is recommended that you transfer out of your estates each year the maximum sum which would be financially convenient to you within the 'exempt transfer' limits described in the 'Introduction to Inheritance Tax' in this Financial Plan.

*Those sums which could be transferred conveniently on a regular basis may be invested in whole of life assurance policies or investment plans written under 'power of appointment' trusts for beneficiaries of your choice. Under current law the proceeds of correctly arranged policies of this kind should be entirely exempt from Inheritance Tax.

Tax Treatment of the Premiums:
Neither {Brief Company Name (in current year) Code:30000630} nor its Financial Planners are qualified to give advice on matters of law and it is recommended that you take advice from your solicitor.

*However, subject to that caveat, it is {Brief Company Name (in current year) Code:30000630}'s understanding that, to the extent that premiums fall within the exemptions outlined on the previous page there should be no Inheritance Tax liability in relation to the gift of the premiums (as mentioned above, the sum assured in any case will be free of Inheritance Tax).

To the extent that premiums fall outside the exemptions there may be a liability to Inheritance Tax in respect of those premiums or part of them. To avoid any such immediate lifetime liability it is recommended that you make gifts to the policy trustees so that they can pay the premiums. To the extent that part or all of these gifts fall outside the exemptions then the amounts outside the exemptions will be treated as potentially exempt transfers. An Inheritance Tax liability may arise but only in respect of such sums paid in the seven years prior to the death of the donor.

To avoid the necessity of opening a special bank account in the name of the policy trustees, it is understood that the Capital Taxes Office will accept that a cheque (of an amount equivalent to a renewal premium for a policy) paid by you to the trustees of the policy may be endorsed over to the Life Office by the trustees in payment of a renewal premium.