Many in the country may still give an involuntary shudder when thinking of the Autumn budget. An unintended consequence of it may see many people seeking to keep their assets away from the clutches of HMRC as far as is legally possible.
People should however seek to avoid the knee-jerk reaction of gifting assets – whether that be money and/or property without seeking legal advice.
The dangers involved in gifting include the assertion of it being a “deliberate deprivation of assets”, leaving the door open for the claw back of that asset into an estate, or the application of:
- Inheritance Tax
- Capital Gains Tax
- Income Tax
Other problems may also arise in that it may impact on your ability to secure Means-Tested Benefits.
Your home may have been used to secure future Finance for your needs, but once gifted can no longer be relied on for that purpose. In effect you will Lose Control over the asset whereby for example the recipient may themselves bequeath the property to another against your will. If the recipient becomes Bankrupt, or has serious debt issues the asset could be subject to a sale to meet creditors’ claims. A Divorce or Separation may invoke the same risks, as would the potential for any wider Family dispute. The answer to avoid those issues may lie in the creation of a Discretionary Family Trust. This offers an efficient, cost-effective method to protect your assets, its value and allow you to retain control when passing them on to your preferred beneficiaries.
If you wish to seek advice on gifts, or to create a Trust, please contact our Private Client Department by telephone on 01233 665544, or via email at enquiries@kingsfords.net to discuss the best options open to you.