Eversden ruling

[Taxbar]

In reply to timbo 33.

I am unaware of any firms withdrawing advice on the House Debt Scheme, because of Stamp Duty. The real reason may relate to legal problems with the way they have implemented the scheme which following Leading Counsel's advice, might no longer be sound; ( as I said above, its enormously complex in tax terms!) The position is clear with regards to Stamp Duty:- This is why I advised that those interested had to move quickly. After December 1st it will not usually be possible to implement the scheme without a charge to Stamp Duty rather than "resting in contract" and that may mean that in practice the scheme is not viable.

Daniel Feingold

[MIKEL]

Taxbar/Daniel

Are you saying that, Between now and Dec 1st the House debt scheme is still viable, ie No Caveats?

MIKEL

[Taxbar]

Dear Mikel,

Are you a professional adviser?
I cannot speak for or confirm the state of any marketed or productised schemes. I cannot also confirm the legal or tax efficacy of any specific action or advice that I am not advising on under my terms of engagement.
However,
Speaking on a general basis it is my understanding of the law that
as far as the Stamp Duty issue goes it is still possible to exchange contracts and defer Stamp Duty, until December 1st 2003. As I have said there maybe other Legal and Tax problems with various other aspects of the House Debt Scheme, that has prompted its withdrawal.



Daniel

[MIKEL]

Daniel

No I am not a professional advisor just someone who is researching the various options. At present it would appear to me, particularly after Eversden, that the remaining options to secure protection from IHT above the NRB with any reservation of benefit are strictly limited and in danger of being challenged by the CTO. I hope I am wrong, but I cannot find any positive news on the matter.

At the end of the day, I want a bullet proof scheme one that is at least protected against retrospective actions be it legislation or otherwise. If I was to seek professional advice for example, what indemnities would be afforded to me from the experts? this is a concern I have.

MikeL

[Taxbar]

Dear Mike L,

I agree with your perspective that the House Debt Scheme and Reverse Ingram involve some element of risk, although there is no retrospective legislative aspect to the Eversden situation. Indeed, the opposite is true, those trusts established before 20th June 2003 are not affected.
However, you make my case for obtaining IHT planning advice from a tax specialist who can advise you accordingly, rather than a product distributor offering a single marketed solution.

There are several other planning opportunities that can take the value of the home out of your estate and have no risk as far as Reservation of Benefit rules and the CTO. I always discuss these with a client before mentioning anything else. They do depend on the client's individual personal circumstances and that is why IHT planning must be bespoke to the particular client, rather than sold as a product:- One size fits all!

Daniel

[drcalewis@aol.com]

Dear Daniel,

I look forward to your article on the mitigation of Iheritance Tax. I wonder if this should appear soon, bearing in mind the IR's enthusiasm for closing cleverly interpreted loopholes, and that I might not survive seven years.

Like your philosophy - I would not recommend DIY surgery - but you would need to find the best surgeon who will not financially cripple you. At least if the operation went wrong you could sue the pants off the knife-challenged individual.

In the house debt scheme ("sale of the house to 'Trust A' to rest in contract") for a 1% fee, is there a lot of difference in work involved in protecting a £100,000 rather than a £10,000,000 house? Should the surgeon base his fee on the value of his client's assets?

How do I find a good communicative "tax specialist", who works on an hourly rate basis for a sum that would not seriously damage my pot for the family inheritance? I am worried that any saving in inheritance tax simply passes in fees to the tax specialist.

Colin Lewis

[MIKEL]

Colin

I think the soltion is here, (I wish)

http://money.guardian.co.uk/tax/story/0 ... 60,00.html

MikeL

[Taxbar]

Just so nobody is misled by MIKEL's
reference to a Guardian article.

This deals only with Resident and Non-Domciled individuals and is irrelevant to a sensible discussion of the options for UK Domiciled individuals with valuable homes.

My article on this issue will be appearing in the next few weeks. It will hopefully make many appreciate that there is a small time limited opportunity to take up this planning and YES the professionals who can do this work properly, charge for it. The majority of people realise that the costs will be far outweighed by the tax-savings; ( They shouldn't be more than 2% of the value of the property and 5% of the tax liability.) as was the case with the EVERSDEN strategy; where those who dallied worrying about the fees missed a huge tax saving!

Daniel Feingold


Daniel Feingold