By: Mischa Weston-Green

Since 2007 over 600,000 estates have been subject to a large decline in asset values due to the fall in property in property markets and their associated equities. This has resulted in almost £1 billion being erased from any potential inheritances according to a leading Hampshire solicitor .

While some clientele may decide to hold on to these assets until the market conditions improve before making decisions about their estate, they could actually benefit from significant tax savings by making the necessary arrangements now and utilise the depressed asset values according to a leading wills solicitor.

One of the traditional ways of saving valuable assets from 40% Inheritance Tax is by gifting them to in the recipient through family trusts and provided they survive for seven years after the gift is given. It is also possible to defer any Capital Gains Tax which would occur on the disposal.

Wealthier clients who also want to give a gift of more than the maximum amount (£325,000), a transfer to a lifetime trust may result in a immediate charge to IHT due to the finance act in 2006. In addition to this one off charge there is a periodic charge to IHT on the underlying capital value of the assets. Once the gift is given the donor also relinquishes control over the gift, which could concern the giver if the receiver may not be responsible for the gift or the relationship could deteriorate.

Despite the potential perks of this system, there is also the system of family partnerships that can give the benefits of the financial security but without the potential loss of control over the asset.

The family partnership works on the basis that older family members/asset holders form a partnership and gift interest of the partnership to younger family members/beneficiaries. Under the terms of the agreement the receivers are not entitled to access the money until a specified age. The agreement also allows for permitted persons to exclude a certain person depending on their age or if they are not a member of the immediate family.

The initial transfer of the partnership does not incur a fee if the amount is over £325,000 and is more suitable for the high value cases. The seven year period of survival is still applicable.

Unlike lifetime trust structures, there is also no ongoing periodic charge to IHT. However, trusts do provide greater flexibility and remain more suitable for making provision for minors.

To summarise now is the prime time to plan for your future and to decide on the best method of how you intend to maximise the amount given to your loved ones.

Article Source:
http://www.goarticles.com/cgi-bin/showa.cgi?C=1755891

About the Author
I am fairly new to the wonderful world of article writing, but have been a copywriter for 4 years. If anyone deems any of my articles good enough for them to add to their blog/website please put my name on it and a link to our website www.mooreblatch.com and use the anchor text ‘Hampshire Solicitor.’