Inheritance Tax Planning – Phizackerley

The recent case of Phizackerley commented on in the Times and other broadsheets in recent weeks seems to indicate that certain types of Will Trust no longer work, which is clearly not the case, and there has been a good deal of negative and incorrect information passed on.

When Gordon Brown started to alter the rules in relation to Inheritance Tax. Trusts and related matters there was a good deal of uncertainty created and this continues in several areas as one would expect when new legislation comes into force.

In simple terms much of what we are now left with remains unchanged, there has been some tinkering around the edges, and the Phizackerley case shows us that this tinkering will continue to upset some planning. The trap set by the revenue was not designed to catch the likes of Phizackerley, and should be regarded as bonus by the Customs and Revenue, however now they know that a far smaller trap can be used to catch bigger prey, living in different part of the woods, and you can expect to see more traps set!

My stance remains unchanged, with a properly executed and well documented planning and the use of the right tools – Inheritance Tax can still be reduced in part and often in full. Leaving the revenue to catch other, unprepared (and under documented) prey.

Importantly for most clients, it is the planning which seems to be put on the back burner, which is fine if thats what clients want to do. However by not putting in place very basic Wills and Simple Estate Planning most are being foolish at the very least.

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