Lloyd's underwriting exemption

by **probate_slave** on Mon Sep 12, 2011 12:11 pm

Can anyone please advise whether there is an IHT exemption for a gift arising from Lloyd's underwriting income?

I may be clutching at straws, but saw a reference in the Which guide (p.31) and also found that Lloyd's income qualifies for 100% BPR under IHTA84/S105(1)(a).

My late father was fastidious in keeping records to satisfy the normal-income-out-of-expenditure rule, yet the only reference I can find to a large payment to my sister in 2005 is a letter on his computer instructing his bank to transfer a savings account to her.
Since he was a Lloyd's Name for ten years until 2002, and told me that his Lloyd's income paid for his grandchildren's education, it seems likely that Lloyd's was the provenance of this savings account (although no documentation exists) and that he believed it would be an exempt gift.

Under these circumstances, would HMRC even allow the exemption if it exists?

Thank you in advance for any and all answers!
Sincerely,
ps

by **probate_slave** on Wed Sep 21, 2011 10:36 am

Anyone?

by **Lee Young** on Wed Sep 21, 2011 12:38 pm

As a Lloyd's Name his interest in that business on his death may/should have qualified as a busniness asset for BPR purposes.

A separate unconnected savings account would not qualify as a business asset.

A one off gift cannot qualify under the regular gifts out of income exemption.

As your father died within 7 years of the gift it is caught for IHT purposes IMHO.

by **probate_slave** on Thu Sep 22, 2011 11:08 am

Thank you so much, Lee Young.

When I next need a solicitor I shall come straight to Frettens, and hope you will still be around.

In fact the 2005 transfer was the not exactly one-off, but the last of a series dating back to 1991 when the school fees began. With some more digging we hope to establish the pattern before 2003, and intend to claim normal-expenditure-out-of-income exemption for it.