The majority of advisers will need to conduct a major review of their clients’ will trust arrangements following the inheritance tax changes in the Pre-Budget Report says Threesixty.
The adviser support services provider says a review will be necessary to assess whether the arrangements in place still produce the best outcome.
Threesixty partner David Ingram says will trusts have allowed advisers to arrange similar benefits to what Darling has proposed. Will trusts are designed to be chargeable transfers on death so that the deceased’s nil rate band is used while the surviving widow or widower/civil partner can still benefit from any income or capital growth from the trust if needed.
But Ingram says: “IFAs who have set these up for clients should now review the potential benefits of these trusts or consider transfer of NRBs. With the trust route any capital gains in it would be outside of the estate of the survivor on his or her death and there is certainty about who are the beneficiaries. But this route means the opportunity to benefit from the rise in the NRB of the first deceased’s will be foregone.”