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Old 28.10.2019, 13:51
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Re: The Brexit referendum thread: potential consequences for GB, EU and the Brits in

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"in sat 18 months" means "within 18 months of having gifted", right?

Just a guess because otherwise the total wealth tax rate in your example would exceed two thirds: aren't CGT and IHT offset, so net IHT if death occured in sat would be 480k? The analogous question arises WRT an inter-vivos trust and the 20% IHT that falls due upon its founding.

What hasn't been touched upon is income. An inter-vivos trust doesn't pay income tax, right? Ignoring the 6% every ten years (some of which seems likely to be bypassed by chosing the appropriate assets), isn't it correct to say that a trust's income is untaxed until paid out, at which point it's to be taxed as income by the recipient, right?


With tax rates like that nothing needs to get sold, that's what income is for, a small portion will do.
No offset with CGT against IHT, both totally separate.

Income in a trust is usually taxable in the recipients hands, if retained its taxed more highly than a person as allowance & rates are higher

Trusts are generally for asset protection, prevents kids & wife spending too much money & are not tax efficient today. Running costs will be 2-3% on a trust of 1,000,000

In reality few people can afford to give away assets, the CGT invested would likely pay the higher IHT, if further assets sold to pay the CGT then more CGT to pay. Taking life insurance for 7 years is an option, less so aged 70
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