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 2 - Inheritance Tax Mitigation: The Basics
 
Review by Mark McLaughlin published in the STEP Journal March 2009

It seems that more and more books these days are available in ‘electronic’ format. This probably reflects how important the internet has become in our daily lives. Or perhaps it is a reflection of our concerns for the environment, and a desire to save the planet by using less paper! Whatever the reason, there is no doubt that ‘e-Books’ have their attractions (even to a technology ‘dinosaur’ like me!), in terms of convenience and ease of access. This is particularly so when the book is as easy to navigate online as this one is (go to http://www.huttonestateplanning.co.uk/ to view a sample chapter, and see for yourself).

‘Hutton on Estate Planning’ is an e-Book, which is also available as a printed book. The author, Matthew Hutton, will need no introduction from me to the vast majority of tax professionals. He is a well known and respected lecturer, and author of various other tax titles, including ‘Trusts and Estates 2008/09’ (Tottel Publishing). Those who have attended the author’s Estate Planning Conferences in the past will no doubt be well aware of the comprehensive, high quality lecture notes, which have become such a popular feature of his Conferences. So it came as no surprise to me that ‘Hutton on Estate Planning’ is so impressive in structure and rich in content.

The opening Chapters outline the scope of the book, and introduce the basics of inheritance tax mitigation. Subsequent chapters cover such subjects as new and existing trusts, the family home and business, leaving the UK, wills and will trusts, post-death planning and compliance issues. As intimated in the book’s Preface, the term ‘Estate Planning’ is potentially open to a wide interpretation. The author has actually taken the opportunity to expand the book into the larger field of private client taxation. A section of Chapter 1 outlines the scope of the book, in which the author explains his “personal approach” to estate planning, encompassing elements of capital gains tax, stamp duty land tax, VAT, and income tax.   

The book is expertly written to a high technical level. As an author myself, I can testify that a good deal of expertise is required to deliver this degree of technical detail in such short, concise paragraphs. Comprehension is made relatively easy, and in addition the author explains often complex tax provisions very clearly and succinctly. Accordingly, this book will no doubt be viewed as a practical guide to estate planning by many practitioners.

The format of the book complements the author’s explanatory style very well. Most of the Chapters begin with an overview of the subject, and end with very helpful checklists. There are also numerous worked examples, and some useful Appendices at the end of the book including an Estate Planning Questionnaire. However, the most impressive feature of the book’s format in my view is the numerous ‘Tax Tips’ and ‘Tax Traps’ throughout the book, which are written in a short, snappy, style. This is an excellent method of highlighting key points in the book.

One of the difficulties in writing and publishing a book on tax is the frequency of new legislation and case law, not to mention changes in HM Revenue & Customs’ interpretations and guidance. This is where an eBook comes into its own. ‘Hutton on Estate Planning’ is updated on a monthly basis. There are two particularly helpful features of this update service. First, there is a section on the eBook website (‘Hutton Updates’), which displays those parts of the book that have been updated. One can simply scroll down the list to find the updates for a particular chapter. Second, the text of the update is displayed in a different colour, so highlighting any changes from the previous month.

My only slight reservation about how the eBook operates is the search engine. The search results seems to show the whole text of the paragraph in which the search term appears (rather than, say, just the paragraph heading), which can mean a lot of scrolling down to find the most relevant search result. However, this is really only a minor point, which should not detract from what is otherwise a very well thought out and organised resource.

Overall, the author’s expert and well-written commentary, together with its flexibility, ease of use and regular updates, should make the ‘Hutton on Estate Planning’ eBook a much valued resource for estate practitioners.
 
‘Hutton on Estate Planning’ is available in both eBook and printed formats.  An eSubscription for 12 months (which includes one copy of the 774 page printed Book) is, for 1 – 10 Users, £199 plus VAT; 11 – 25 Users, £249 plus VAT; and 26 – 50 Users, £299 plus VAT.  The printed book only is £59 plus £5 p&p.
Review by Jane Moore, TAXline, March 2009 - Issue 3

I was interested to review Matthew Hutton’s book on Estate Planning, not just for its technical content but also because of the innovative way it has been published. Although available in hard copy (published last September), it is in fact primarily intended as an electronic product. The whole text can be accessed online and is updated monthly. This addresses one of the major headaches of the tax publisher these days – that almost as soon as you write something, it goes out of date.

The focus of the book is on mitigating the effect of inheritance tax (IHT) on death. It also considers other taxes which may be relevant, including CGT, SDLT, VAT and income tax. It is aimed primarily at professional advisers, and it explains the basics as well as providing food for thought for those who are specialists in the field.

There are 21 chapters plus an index and lists of cases, statutes and other relevant material. The chapters are well organised, each starting with an overview of what the chapter covers and ending with a checklist of things to think about. Matthew has a background in private client advice, and the text contains plenty of examples and also highlights Tax Tips and Tax Traps.
The subject matter of the chapters ranges from the basics of IHT mitigation, to the use of trusts, and then to specific planning for the family home, the family business, farms and woodlands, etc. There are useful sections on overseas issues, including offshore trusts, on wills and on post-death planning. All in all, a very useful and comprehensive handbook.

The electronic version of the book is at www.hutton-estate-planning.co.uk. It provides the full text of all the chapters together with monthly updates. Its great strength is these regular updates, which are inserted into the text (highlighted with a different colour) and dated (a practice HMRC would do well to emulate in its manuals). The eBook provides a search function and various ways of navigating around the material. You can, for example, view all the updates from a particular date. There is also a facility to email Matthew with comments.

The printed book on its own costs £59 (plus £5 postage). The online service, which includes a copy of the book, costs £199 (plus VAT) for a 12 month subscription for 1–10 users (you can add more users for an increased subscription). You can register to sample the eBook before deciding to subscribe.

For Tax Faculty members Matthew Hutton has kindly offered a 10% discount on subscriptions to the online service (to include the hard copy book).
Review by Malcolm Gunn in Taxation on 22 January 2009

Writing a book on technical tax issues is a daunting project for anyone to undertake, but one on estate planning must surely be one of the most complex tax topics which anyone may have to tackle. ‘The combination of inheritance tax charges, pre-owned asset provisions, and capital gains tax charges, together with more numerous restrictions on holdover relief, settlor charges and reservation of benefit provisions means that with any given case you will soon be delving into at least three Yellow Books at the same time and trying to digest some of the most impenetrable language in tax legislation. Matthew has therefore attempted the near impossible — producing an easy to read guide to this topic where points of detail can often be open to various interpretations. And the result is a book which will be very useful to the general tax practitioner, and a good point of reference for the specialist in estate planning work.

There are 21 chapters which range over the basics of inheritance tax and trusts as well as more detailed advice relating to the family home, the family business, non-domiciliaries, offshore trusts and companies, wills and post-death planning.

Given the scope for debate about how the legislation applies to different arrangements, you may well want to query Matthew’s views. I did! The great strength of this book is that it is primarily an electronic work which will be updated monthly. So although there is the published version of the book which you can buy and put on your bookshelf, much the better thing to do is to subscribe to the electronic version and you will then have access to the most up-to-date advice available on estate planning. Matthew says in his preface that obviously he cannot respond to every e-mail asking for comment on a particular situation, but nevertheless he does welcome feedback on any possible errors or omissions. So you get the chance to discuss the text with the author.

Readers who are familiar with Matthew’s style from his other books, will know that he steers a careful path through not being over-simplistic nor being over-complex. He flags up possible areas for debate or different interpretation, gives a brief view and is then on to the next topic. And if you have a different interpretation, send him an e-mail!

There are many practical examples and the book is peppered with little items highlighted as ‘tax tips’ which I have always found very helpful in Matthew’s previous literary expeditions.
The web version of the book is very easy to navigate. There are updates already, marked with the date of each item concerned. All in all, this book will be a very useful addition to anyone’s tax library. 
Review by Sharon McKie of McKie & Co (Advisory Services) LLP in [2009] Private Client Business Issue 1 (January 2009)

This new book, available both in electronic and printed formats, fills a valuable niche in the estate planner’s library.

A new book on any area of taxation by Matthew Hutton is always something of an event for those interested in taxation. Matthew’s coverage of the taxation topics on which he writes is always comprehensive, clear and practical. The market place for taxation publications, however, is ever busy and one asks of any new tax book: what needs does it satisfy which are not adequately satisfied by existing publications?

The area in which Matthew writes is a crowded one. Leaving aside the general looseleaf publications such as Simons and the British Tax Reporter, and the magisterial although now rather dated, McCutcheon on Inheritance Tax, the busy practitioner is already well served by Tolley’s Inheritance Tax which summarises most of the relevant statutory provisions, case law, and published material from HMRC and the professional bodies and by Tolley’s Inheritance Tax Planning which sets out some of the more straightforward techniques for minimising IHT.

How does this book differ from others in the market place?
Matthew summarises his subject-matter like this:

‘‘Certainly, this book is primarily about saving IHT; that is, reducing to manageable proportions the burden of IHT on death, so ensuring that more of one’s assets go to one’s children or other beneficiaries than to the Chancellor of the Exchequer - . . . While the book is essentially about mitigation of IHT, there are other taxes, especially capital taxes, which should not be forgotten.’’

So the book is primarily about reducing the burden of IHT on one’s estate whilst taking into account the provisions of other taxes to the extent that they impinge on that aim.
It is this emphasis on tax reduction which distinguishes it from Tolley’s Inheritance Tax and its broader view of the impact of other taxes which distinguishes it from Tolley’s Inheritance Tax Planning. In that way, its coverage is perhaps nearer to my own annual work, Tolley’s Estate Planning, written jointly with my husband, Simon McKie, although it does not attempt, as we do, to provide as much background information about other areas of the law which impinge on tax planning, such as the law of trusts or of probate, and the practical, non-tax considerations which constrain and inform IHT planning.
  
Matthew’s book concentrates more closely on purely taxation matters so it usefully fills the niche between Tolley’s Inheritance Tax and Tolley’s Inheritance Tax Planning on the one hand and my own Tolley’s Estate Planning. In the years to come, it will no doubt appear on the shelves and, as we shall see, the computers of most serious professionals advising on estate planning.

The structure of the book
The book is logically structured moving, over 21 chapters, from an overview of IHT mitigation, to considering trusts, the family home and business, farms and woodlands, chattels and investments and other financial products, charitable giving, the family unit and heritage property before considering the offshore dimension.

It then looks at Wills and post-death planning before, finally, considering the technique of formulating and regularly reviewing an IHT mitigation strategy.

Each chapter starts with a useful overview of what is contained in that chapter and, as always with Matthew, where alternative views of a question have been published, those alternative views are scrupulously recorded. The book itself is a handsome volume, attractively laid out and easy to read, in spite of its weight of one-quarter of a stone.

The electronic version
So far, I have only been considering the work as a printed book. One of the useful features of it, however, is that it is also available as an ‘‘e-book’’ which can be accessed via the internet by subscription.

The e-book version is well presented and easy to use and is updated monthly, a frequency which only the largest publishers of the standard tax databases can normally meet. Rather than producing just a list of updates on a monthly basis, Matthew incorporates the changes into the main text of the book which is invaluable. The text, both in the hard copy and in the e-version, is easy to read mainly because it is signposted by a logical structure of headings of various weights which ensures that the structure of the discussion can be easily determined with  just a glance. The text is sprinkled with short, practical points labelled ‘‘tax tips’’ abstracted from the main text. The navigation of the material is improved by the insertion of hypertext links.

The search facility is straightforward and simple to use.

As I have said, the book is updated monthly. The left hand side of the page shows the paragraphs which have been updated. Also, the amended text carries the date at which the amendment is made, so that the reader can be clear when the particular part of the text which he is reading was last amended. The amendments are shown in the text in red so that a regular user will be alerted to the fact that a part of the text has changed. There is also a useful facility for the reader to see what has been amended between a selected date and the most recent update.

One feature which is both unusual and useful is that in the top right hand corner the date of the expiration of the subscriber’s subscription is given, so that one is reminded to renew.

All in all, this is a clear, comprehensive and useful book for the practitioner looking for a single volume work on IHT planning which takes proper account of the effects on such planning of other taxes. The e-book is a well designed and useful aid which offers significant additional advantages over traditional hard copy. In a crowded market place it usefully fills a niche. I would thoroughly recommend it to the practitioner.
Review by Jeremy Moody, Central Association of Agricultural Valuers Newsletter, December 2008

Matthew Hutton has just produced a comprehensive and substantial text focusing on factors which affect the taxpayer’s liability to Inheritance Tax.  Inevitably, it also touches on interactions with other taxes – CGT, SDLT, VAT and Income Tax – as they can have consequences in this context.

Drawing on his lecturing practice, it is lucidly written (for the subject) with substantive chapters on the general principles of Inheritance Tax, the family home, the family business, farms and woodlands, chattels, investments, heritage property, wills, litigation, the use of trusts and other financial and planning issues. It is perhaps particularly useful for its reprise of the specific facts in the accumulating number of key decided cases – the facts that help give a proper context and meaning to these decisions when applying them to practical situation.  While available as a paperback text, it is primarily published as an electronic version by subscription which Matthew Hutton is to update as developments occur.
Mark Lee, Chairman of the Tax Advice Network, posted on Monday 17 November 2008

I've been attending Matthew Hutton's very useful Monthly Tax Review sessions for some while now. We share a desire for sharing knowledge and for commenting on current tax developments.

One big difference between us is that Matthew has made time to write a heavyweight book on 'Estate Planning'. I have a copy in front of me as I type this. I can't imagine how Matthew managed to do this on top of his other regular activities. More than that though Matthew has set a new standard for tax books as he has committed to publishing monthly updates. Indeed the entire book is also available as a web based resource thus making it very easy to find just what you are looking for. The book was initially published in September 2008 and the online version already now benefits from 2 updates which are incorporated into the text.

When I was in practice and researching technical material I knew how important it was to check the publication date of any books to which I referred. And I sympathised with the publishers who were reduced to promoting out of date books when the authors had not updated them. Very few tax books require no updates at all during the year.

Hutton on Estate Planning was evidently written as a labour of love and Mathew is to be congratulated on his commitment and dedication. I love the sub-title "Practical Solutions to Today's Problems" as this highlights the approach he has adopted throughout the book. The text is also sprinkled with highlighted 'tax traps' as well as extensive case and legislative references.

If I were still involved in the provision of tax advice myself this is one book I would want on my shelf. More than that I would also want to be able to access the ebook version too. Without it you are reduced to having to check various sources to identify the impact of new case law, HMRC publications and related material that arises throughout the year. I suppose that if I was a dedicated reader of a pre-existing annual publication on the same subject matter I might remain 'loyal' but I'm not sure that there is a comprehensive alternative and especially one that is kept so uptodate throughout the year.

And for those who wonder about Matthew's commitment in this regard - do note that he has proved his credentials as he has been writing monthly tax updates for fifteen years already.

As I said above, this book (on and offline) sets a new standard for tax publications. It won't be easy for the mainstream publishers to replicate this but it's something they will need to consider.

Comment by Michael Blake, Sole Practitioner

I had a spare hour to browse through the Book this morning.  It looks elegant and reads very well.  A valuable addition to the bookshelf and the updates to the e version works very well.  Well done.

Comment by Dawn Oliver of Harrison-Clark LLP

We have always used Matthew's books and the new eBook just makes that experience so much better.  Matthew's style is concise and up to date and his eBook will surely be at the forefront of resource materials for private client lawyers for many years to come.

Comment by Katherine Fidler of Mishcon de Reya

Academic yet practical, Matthew Hutton's Estate Planning e-book combines clear explanations of complex tax issues with innovative tax planning ideas.  Matthew Hutton excites the academic interest with his series of delightful tutorials, each culminating in an ingenious "Tax Tip".

Comment by Brian King of Christchurch Consultancy

I am absolutely delighted with your eBook and the way it works, and amazed that my old-fashioned and somewhat senile brain finds it so easy to use!