'IHT Planner' Software (from PTP)

Reviewed by Mark McLaughlin ATII ATT TEP

They've done it again!

It seems that PTP have done it again! They have identified a gap in the market for a piece of tax software that will be useful to a huge professional market, and introduced a helpful, time saving product at an affordable price, that can be exploited as an 'added value' marketing tool by firms offering tax services.

Introduction

Inheritance Tax (IHT) is an area of tax planning with which many practitioners may not previously have been too concerned. However, with the recent escalation in property prices, the value of the family home alone is likely to give many clients a potential IHT problem. And let's face it, clients are becoming increasingly demanding as far as service from their professional advisers is concerned. This is where IHT planning can help.

The Product

As you might expect, PTP's 'IHT Planner' has the facility to save information for multiple clients. There are three main sections to the planner, namely 'Lifetime Transfers', 'Chargeable Estate' and 'Calculations'. A customised report can be prepared and printed for each client. Different IHT planning scenarios can also be saved for the same client.

The 'Lifetime Transfers' section allows the user to input details of past and possible future transfers, both chargeable and potentially exempt, and to specify whether any relief from IHT is available in respect of them (e.g. payments to charity or gifts in consideration of marriage). The IHT position is calculated and can be viewed on a cumulative basis for each transfer, showing any IHT payable (at the time of a lifetime transfer and/or on death) or the remaining nil rate band.

The 'Chargeable Estate' section allows for the addition of assets and liabilities (including pecuniary liabilities), and the allocation of the residuary estate between beneficiaries. Specific assets can be allocated to particular beneficiaries in accordance with the client's will, and account taken of any gifts with reservation of benefit, available relief (e.g. business property relief) and tax attributable to successive transfers ('Quick Succession Relief'). For those clients without a will, it is possible to set up the software as an intestacy planner.

The 'Calculations' section gives amounts and a full breakdown of tax on the chargeable estate, and also additional tax in respect of failed PETs.

The IHT Planner produces a selection of reports, which can be edited for individual clients. The full report I printed off ran to an impressive 10 pages, and contained summary and detailed IHT calculations, breakdowns of lifetime transfers, assets, liabilities and so on.

Rather disappointingly, the version of the IHT Planner sent to me was only a demonstration version, and I was unable to have a proper 'play' with it in order to evaluate the software fully. However, overall I was quite impressed with what I did see.

Do I have any criticisms or reservations about the IHT Planner? Not really, such as it is. However, it would be really helpful if PTP could develop IHT software to produce Inland Revenue returns in respect of the death estate (IHT 200) and also chargeable lifetime transfers (having said that, a version of the software dealing with the IHT 200 return is understood to be on its way). But for planning purposes, as the phrase goes, "it does exactly what it says on the tin"!

The Cost

As with all PTP tax software products in my opinion, the IHT planner is good value for money, a 12 month single user licence costing just £99 and a multi-user licence costing £199 (both plus VAT). To order your copy, go to http://www.ptpgroup.co.uk/softorder.htm.

Summary

I envisage the IHT planner being useful in a variety of situations. For example, practitioners not previously involved in estate planning to a significant degree could use the planner to prepare inventories of their clients' estates for IHT purposes as a starting point in the tax planning process. This estate inventory (with tax calculations) could be given to the client as a basis for IHT planning. A revised report could then be produced following this planning exercise, illustrating the potential IHT savings achievable from implementing the planning recommendations. The IHT Planner should save much time and number crunching when dealing with "what if?" scenarios of this nature.

The relatively modest expense of buying the IHT Planner is likely to be recovered very quickly after it is brought into use on behalf of clients who are eager to reduce their potential IHT exposure. Who knows - it may help to generate additional fees in a largely untapped area of tax planning. Why not give it a try?

Disclaimer

The views expressed in this review are those of the writer only and not necessarily those of TaxationWeb. No responsibility can be accepted by the writer or TaxationWeb for any loss arising from action undertaken or refrained from as a result of this review.

Mark McLaughlin
September 2003