Chapter: 2 - Inheritance Tax Mitigation: The Basics

What is it?

2.10.1

Long gone are the days where the family unit might be generally understood as meaning husband, wife and 2.4 children.  And in very many cases, the needs of what might be called ‘the extended family’ must be taken into account.  However, for purposes of this Book I am concerned primarily with just two (or possibly three) generations and a fairly close-knit set of relationships.  The older generation might be a married couple, a civil partnership, a couple living together or a single parent.  The younger generation (if any) might be one or more children or step-children of any of the above, whether minors or aged 18 or over.  The basic fiscal framework requires one to consider: (a) whether or not an IHT exemption, and indeed a CGT relief, applies on transfers of assets between members of the older generation; (b) whether an anti-avoidance regime applies for Income Tax and CGT purposes in relation to income and gains accruing to individual minor children or trustees for them; and (c) how gifts to or for the benefit of children are treated for IHT, ie whether made outright or in trust.