- It's never too late (Non-Habitual Residence (NHR)) - Published Oct 2018 by Raoul Ruiz Martinez
- Are You on Top of GDPR? - Published May 2018 by Raoul Ruiz Martinez
- Financial Fitness - Published Jan 2018 by Raoul Ruiz Martinez
- Six Tough Questions You Need to Ask - Published in Nov 2017 by Raoul Ruiz Martinez
- Plan for a Successful Retirement - Published Oct 2017 by Raoul Ruiz Martinez
- 5-year Plan, 10-year Plan, 30-Year Plan. Do you have yours? - Published August 2017 by Raoul Ruiz Martinez
- The Will Bank Opportunity by John L Douglas - Published in The Journal of the Law Society of Scotland 17th July 2017
- August 2017 - HMRC & Offshore Accounts for UK Residents
- A New Year, A New Start…. January 2017
- Inheritance Tax (IHT) Planning (Part 3) - Published November 2016
- Planning for a Better Future? Forget Trusts. Think Family Investment Companies! - Published Nov 16
- Inheritance Tax Planning (Part 2) - Published August 2016
- BREXIT: What do we know as investors and what are the unknowns? Published in July 2016
- Inheritance Tax Planning (Part 1) - Published in June 2016
- Why is tidy a key word in financial planning? Published May 2016
- The Future of International Financial Planning - Published in March 2016
- Volatility: Global Financial Markets and Tax - Published Feburary 2016
- Financial Information Sharing for 2016 - Published December 2015
Summary of the 2015 Pension Flexibility - Published 5th May 2015
Offshore bonds get £5k tax free savings boost - Published 29th April 2015
How your peers invest clients’ money: Finesco Financial Services Ltd - Published in Professional Advisor 25th March 2015
- TRUSTS : Good Reasons to Never Make a Change - Published March 2015
- Saving....for Ourselves - Today's children will need A £2.4m pension pot.
- Cash is King - Article Published 25th July 2013
- Saving – Don’t Put Off Till Tomorrow What You Can Do Today - Article Published 23rd May 2013
HMRC Statutory Residence Test - 6th April 2013
- QNUPS Article Published 23rd March 2013
- Old New Year - Article Published 24th January 2013
- Retirement and Savings – The Facts on Inflation published November 2012
- Finesco Prsentation on New Pension Rules - A New Generation Begins
HMRC Pension Tax Relief Changes
- Emergency Budget:
- Budget Day: 22 June 2010
- Capital Gains Tax Angles
- Long Term Care
- QROPS: Transferring UK Pensions Overseas
- The State of Pensions
- ISA Changes Affecting You



Inheritance Tax Planning (Part 2) - Published August 2016
Estate planning is often conceived hand-in-hand with inheritance tax planning involving the creation of structures such as trusts, wills and powers of attorney. The former demands tools and logic to “tidy up” your affairs before dying. For the latter, the awareness of any potential liability does not usually register until later in life.
As people grow older they become more aware of the potential IHT liability on their estate. However, the earlier IHT planning starts, the easier it is to reduce the eventual tax bill. Forewarned is forearmed and now lets proceed with Nº 2 in this series with the use of Potentially Exempt Transfers (PETs).
PETs may provide individuals with valuable tax-saving opportunities, if you can afford to make gifts of substantial amounts, normally to your family. The main advantage of a PET is that there is no lifetime IHT charge, regardless of the amount gifted. Therefore, even if the gift exceeds the nil rate band, it will not incur an IHT charge of 20% on the excess. However, if the donor does not survive the seven-year PET period, IHT may be payable if the amount gifted is not covered by the donor’s nil rate band. For gifts in excess of the nil rate band which become taxable, taper relief may be available if death occurs after three years of making the gift. Taper relief effectively reduces the amount of IHT payable on the gift on a reducing scale once the donor has survived three years.
Gifts to bare (absolute) trusts are treated as PETs and an advantage of this type of trust is that there is no periodic or exit charge on the value of trust assets, although the trust is inflexible in nature.
• It is important to consider any Capital Gains Tax (CGT) consequences of gifts. A gift to a spouse or civil partner will be a no gain, no loss disposal provided they are living together, whereas a gift to any other person will not be.
• By covering the possible IHT liability on a PET with a seven-year term life assurance policy, clients can make lifetime gifts without fear of the impact of tax on a premature death. If a PET is made in excess of the nil rate band, any potential liability to IHT on that excess could be covered by a form of decreasing term assurance over seven years.
• Several factors must be taken into account when considering possible PETs of business or non-business assets:
1. Whether the assets produce income that is needed.
2. The level of IHT business relief on gifts of such shares or other business assets.
3. The availability of CGT holdover relief for gifts of business interests. CGT is chargeable on a gift of an asset as if the asset had been transferred at market value.
4. Whether the client should maximise their pension provision before making a gift of private company shares or other business assets.
There is now significantly less scope for taking advantage of the PET rules. Lifetime transfers into flexible type trusts are now chargeable lifetime transfers (CLTs), not PETs. Thus, for most practical purposes, a PET must be an outright gift (either to an individual or to a bare (absolute) trust).
Look out for the next and third article in this series on Inheritance Tax Planning when we will identify the pitfalls and the tax issues related to Chargeable Lifetime Transfers (CLTs) and how you can avoid these, simply by making gifts in the right order.
This article is intended to provide a general review of certain topics and its purpose is to inform but NOT to recommend or support any specific investments or course of action. Taxation depends on individual circumstances as well as tax law and tax authority practice which can change. Not all IHT planning is regulated by the FCA.
Raoul Ruiz Martinez is a resident and independent consultant for Finesco Financial Services Ltd., Glasgow and advises clients on private financial matters in both the UK and throughout Europe under the MiFID regulation. Finesco Financial Services Ltd is authorised and regulated by the Financial Conduct Authority (FCA). Some of the services provided are not regulated by the FCA because they are not included within the Financial Services and Markets Act 2000.
Raoul has a weekly radio feature (Raoul’s Rant) on the Owen Gee Solid Gold Sunday morning show on KissFM Algarve.