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Pension Freedoms

Technical Eye - Q1 2014

Technical Eye - Q1 2014 

In this issue:

Spousal bypass trusts

This article reviews the technical aspects and the use of spousal bypass trusts in estate planning. They are a simple and low commitment way of potentially saving thousands in IHT.  They should be considered for all estate planning clients with pension arrangements.


ISAs and IHT

For many years we have been discussing how calling ISAs ‘tax-free’ is a complete misnomer; because they are subject to inheritance tax. Recent changes mean that they can be free of IHT as an investor can now hold AIM shares in an ISA and they can be totally tax-free (albeit suffering withholding tax).


In this regard, disregard

It has long been known that an investment bond which is a life assurance policy – as opposed to being a capital redemption bond – is not included in the means testing used to determine the resident’s contribution to local authority’s costs.

Given the recent focus on the issue of funding care, as appropriate to England, we recap on the situation.


Holistic planning is usually essential when giving retirement advice

The opportunities for effective financial planning, tied in with estate planning, mean that clients should not act in haste and get professional advice before crystallising any pension benefits.

This article shows how a holistic approach is essential when deciding on how to take retirement benefits.


An education in control and access

Accumulation and maintenance trust fell out of favour following legislative changes in the Finance Act 2006, however there is an IHT efficient alternative; the Controlled Access Trust. This article explains how the trust allows gifts to be potentially exempt transfers and restricts access past their 18th birthday allowing settlors to control the timing of benefits.


Interest in intestacy

This article considers the situation where someone dies intestate and the surviving spouse would prefer a lump sum rather than a life interest in part of the deceased’s estate.


Warning: The information in these articles was correct at the date of publication issue and may have changed since that date.


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