Deputyships and Lasting Powers of Attorney (LPA) are roles with much in common. Both legal appointments, they’re designed to manage the affairs of individuals suffering from mental incapacity. The two positions are both appointed to make decisions on behalf of an individual regarding financial matters, healthcare and welfare but they differ in the path taken to appoint them.(more…)Read More
To protect their disabled son in the future after an accident left him injured, retired couple Kristina and Olaf Rogge set up a trust fund. Now, they have discovered this action could result in them paying £100,000 per year while they’re alive or leave millions payable by their son in death duties.
Once a successful investor, Rogge is now trying to reverse the payments made in trust to benefit his son in a legal dispute taking place at the High Court. He stated he would not have made the payments if he had fully comprehended the complicated rules of inheritance tax
The Hampshire couple’s case comes following a recommendation by an independent government adviser The Office of Tax Simplification that the system required a serious overhaul to make the levy more clearly understood.
Typically gifts made into trust to benefit the disabled are tax exempt. The majority of gifts will also be exempt from inheritance tax if survived for seven years.
The couple bought and developed a manor house in Hampshire to the cost of £15 million with a wing of the house designed for their son’s needs. As the Rogges continued to live in the property, they were judged to benefit and were not applicable for tax relief. Unaware of this, the couple triggered a tax trap which required them to pay £100,000 yearly for the remainder of their lives or leave their son to pay £6m in inheritance tax.
The inheritance tax rule states that gifts will not receive tax relief if those making such a gift will continue to benefit from the asset passed down.Read More