The Chancellor has just announced that spouses and civil partners may now transfer their tax-free allowances between themselves. The idea, I suppose, is that this would enable their heirs to receive more than the basic inheritance tax allowance.
Correct me if I’m wrong, but can the same effect not be achieved by couples structuring their wills to ensure this? And even after one of the couple have died, I would have thought it was still possible effectively to amend the will to achieve this result, by using a post-death variation.
If it is already possible to do all this, what exactly is the value of this new tax relief?
I would appreciate any enlightenment.
UPDATE. 8.23pm. Seems like my initial suspicion about this ‘tax relief’ has been proved right. Fraser Nelson of the Spectator is reporting that City accountants have raised the point that this so-called ‘tax relief’ can already be achieved by a couple structuring their wills properly. See also this article here.
These New Labour people just can’t stop spinning.
October 10th, 2007 at 4:32 pm
Right on the button as usual bell
October 10th, 2007 at 7:22 pm
What else I have read - it seems no real change is made.
October 11th, 2007 at 3:55 pm
i still dont get how this couples allowance thing will work for kids - does it mean both parents have to die in the same car accident at the same time?
October 12th, 2007 at 11:42 am
The main point on the tax threshold is the number of people who estimated that their property will be worth more than 300,000 when they retire. People in their forties and fifties now seeing prices rise and guessing what will happen..
October 12th, 2007 at 6:30 pm
Just “New Labour”?
Pretty sure all the political parties are more than adept at spinning, Bel.
New Labour didn’t invent spin. They haven’t even perfected spin. If there is any more spin in this government, then it’s a reflection of the salivating, story-staved 24-hr media.
Every political body has spun. Always have.
Methinks Cameron, with his media background, will more than match Labour.
“Spin” is a lazy attack. “Playing a daft media”, would be more apt.
October 12th, 2007 at 9:15 pm
“Spin” is a lazy attack. “Playing a daft media”, would be more apt.
There’s something in that, Tyger.
But it is spin. Giving the impression that a bumper tax relief has been granted, whereas not - that is spin.
October 12th, 2007 at 10:15 pm
Come on Bel, give Brown a break.
There is nothing left in the pot. He has few good-news opportunities. Don’t kick a guy for making the best play with a shitty hand.
October 13th, 2007 at 11:35 am
True, Tyger.
The thing is, I wouldn’t have minded too much if he had nicked the exact Tory proposal on inheritance tax, because then people would have benefited from a tax break.
What annoys me is that he has given the impression of granting a tax relief, but in actual fact the only benefit he has given is that couples need no longer go to a solicitor to structure their wills to use the two nil rate bands. So we have been saved a trip to the solicitor and a few hundred pounds in legal fees. Hardly ground breaking.
The person losing out here is the taxpayer, and that makes me angry.
October 15th, 2007 at 10:23 am
It’s all going to change when I’m in charge, Bel.
They’re processing the paperwork as we speak.