Inheritance tax treatment on bare trusts for minors made clear
The ABI has received written confirmation from HM Revenue & Customs that bare trusts for minors will not be treated as a settlement for inheritance tax (IHT) purposes. Until a few months ago, the prevailing view had been that a gift to a bare trust for minor beneficiaries was a potentially exempt transfer (PET). The Revenue then indicated that it might adopt the view that such a gift would actually be a chargeable lifetime transfer (CLT). The implications of a CLT would be an immediate IHT charge of 20% where the value of the gift exceeded the nil rate band (£300,000 for tax year 2007/200...
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