RJS LAW - Tax & Estate Planning’s Post

Although Inheritance Tax was not high on the agenda (once again!) in yesterday’s Spring Budget, it did make a cameo appearance and there were some notable changes to the UK tax system that were outlined by Chancellor Jeremy Hunt. Jessica Lawson, Solicitor in our Private Client team provides a summary of the changes: https://lnkd.in/eKX_WArS #springbudget #springbudget2024 #uktax #inheritancetax #capitalgainstax #stampduty

On a number of occasions I’ve come across potential clients… who have gleefully explained they have carried out some inherence tax planning…. By transferring the property they live in, to their children… And then I have the , somewhat awkward task of telling them…. It does work for inheritance tax planning… and even worse… it will give their children a capital gains tax problem… the absolute worst of all worlds… Let me break down the tax issues… Say the house cost the parents £150k, was worth £600k when given to the children, and was worth £900k at second death…other assets were £100k Then the house gets sold for £900k… For inheritance tax planning… unless it’s done a particular way… it is caught by anti avoidance called gift with reservation of benefit… in effect if you give something away but still benefit from it… it doesn’t work and is ignored, and added straight back into the estate for calculating inheritance tax If the parents would have done nothing… no inheritance tax and full proceeds go to the children Now, the house gets added back into the estate, so no inheritance tax, but when it’s sold, be a 24% capital gains tax liability on the £300k gain, so £73,000 tax is payable… If you want to know some inheritance tax planning that does work… then… let’s book a meeting and see what can be done… sometimes it is too late… but often… something can be done… and although there is a charge for these meetings… if I cannot offer a solution that saves at least five times as much tax as the meeting costs… including the VAT…there will not be a charge… Guaranteed 🥳 #inheritancetax #taxplanning

Understanding the tax-free threshold is crucial to minimizing tax liability and maximizing the assets you inherit. There’s no federal inheritance tax, though some places levy it at the state level. The federal estate tax exemption—or the amount of an estate’s value exempt from federal estate tax—is $13.61 million in 2024. This is an increase from $12.92 million from the prior tax year. If the estate’s value falls below the threshold, it is exempt from federal estate tax. However, if the deceased owned the asset or resided in a state with inheritance tax, the estate may also be liable for state inheritance tax in addition to federal estate tax. Exploring tax-efficient investment options can help you preserve and grow inherited assets: 🔸Real Estate Investments - Investing in real estate offers the potential for steady income, long-term appreciation, and tax benefits like mortgage interest deductions, property taxes, and depreciation. 🔸Real Estate Investment Trusts (REITs) - REITs are investment vehicles that allow investors to participate in income-generating real estate without the complexities of direct property management.  🔸Delaware Statutory Trusts (DSTs) - If you inherit real estate and wish to defer capital gains taxes upon its sale, you can use a DST as part of a 1031 exchange. Click to read our full article on navigating inheritance tax and minimizing tax liability... https://lnkd.in/gq37A3Gd

👫 FAQ: UK Property Income Tax for Married Couples 🏠💑 Navigating property taxes can be complex, especially for married couples. Here are some common questions we get: Can we split our rental income for tax purposes? 💼 Yes! If you jointly own property, you can split the income and expenses. However, the default split is 50:50. If you want a different split, you need to change ownership status and declare this to HMRC. What if one of us is a higher-rate taxpayer? 📈 It might be tax-efficient to allocate a higher income share to the lower taxpayer. But remember, the allocation should align with actual ownership shares unless you’ve made a formal declaration. Can we transfer property between us to save on tax? 🔄 Transferring a property share to a spouse can be done without immediate capital gains tax (CGT) implications. However, future rental income and eventual sale proceeds will then be taxed according to the new ownership. Are there Stamp Duty considerations when transferring property? 📜 Generally, transfers between spouses are exempt from Stamp Duty Land Tax (SDLT), but there are exceptions, especially if the transfer involves an outstanding mortgage. How does Capital Gains Tax work if we sell our rental property? 🏡 Each partner has an annual CGT exemption. So, splitting the property might allow you to maximise these allowances upon selling. But, specific rules apply, so professional advice is key. What about the Additional Dwelling Supplement? 🏢 If purchasing additional property, you might be liable for higher SDLT rates. It's a complex area, especially concerning marriage and civil partnerships, so let's talk specifics. Got more questions or unique scenarios? Drop a comment or send a message. We're here to help you make the most out of your property investments! 🔖 #UKTax #PropertyIncome #MarriedCouples

There’s a lot to consider when planning your estate, but one thing that’s often missed is the impact that state estate and inheritance taxes can have on your financial legacy. In this article, we go over what you should know about estate and inheritance taxes, and what your first step could be to potentially reduce your future tax burden.

There’s a lot to consider when planning your estate, but one thing that’s often missed is the impact that state estate and inheritance taxes can have on your financial legacy. In this article, we go over what you should know about estate and inheritance taxes, and what your first step could be to potentially reduce your future tax burden.

There’s a lot to consider when planning your estate, but one thing that’s often missed is the impact that state estate and inheritance taxes can have on your financial legacy. In this article, we go over what you should know about estate and inheritance taxes, and what your first step could be to potentially reduce your future tax burden.

There’s a lot to consider when planning your estate, but one thing that’s often missed is the impact that state estate and inheritance taxes can have on your financial legacy. In this article, we go over what you should know about estate and inheritance taxes, and what your first step could be to potentially reduce your future tax burden.

There’s a lot to consider when planning your estate, but one thing that’s often missed is the impact that state estate and inheritance taxes can have on your financial legacy. In this article, we go over what you should know about estate and inheritance taxes, and what your first step could be to potentially reduce your future tax burden.

There’s a lot to consider when planning your estate, but one thing that’s often missed is the impact that state estate and inheritance taxes can have on your financial legacy. In this article, we go over what you should know about estate and inheritance taxes, and what your first step could be to potentially reduce your future tax burden.