WHAT TO CHECK IF YOU HAVE A DISCRETIONARY TRUST

As discussed in the pevious News Article, most people with existing Will Trusts will want to retain these in their wills as there are long term tax benefits over the transferable allowance route for the family.

However, there is one advantage that the new transferable nil rate allowance confers. The Chancellor has said he will link the 'nil rate allowance' or NRB or amount you can pass tax free, to the House Price Index (HPI). The current 'nil rate allowance' is £300,000. If a husband dies this year and his widow dies ten years later and the allowance is £600,000 the total amount the estate can pass on tax free will be £1,200,000. If the couple used the Discretionary Will Trust to 'Double Up' their allowance, unless the trustees of the trust have the power to index the amount originally passed into trust by the House Price Index, the total tax free element could be just £900,000 (£300,000 husband's allowance + £600,000 wife's allowance.

This is easily rectified by giving your trustees the power to index the value of the loan by way of a codicil. We can provide this free of charge to clients who completed their estate planning with us after 8th October 2006 FREE OF CHARGE as our clients may request any change to their will within 12 months free of charge.

For existing clients of UK Will and Trust or Medical Finance who completed before then we can provide the codicil with additional powers for £25.00 per will or £35.00 per couple.

For non-clients who had their wills drawn up by another company we can provide a review of your will for £25.00 per will or £35.00 per couple. Any additional codicil giving additional powers to trustees would cost £25.00 per will or £35.00 per couple. So if you have a will drawn up by someone else we, can review and make any change to the powers of trustees for £50.000 per will or £70.00 per couple.

If on the other hand you feel the Will Trust should be removed, we can do that as well.

If you wish to review your will in light of changes to the rules surrounding IHT

Posted on 17 October 2007 at 11:08 by John