Inheritance Tax mitigation
Inheritance Tax mitigation
INHERITANCE TAX MITIGATION
USING AN IOU DISCRETIONARY WILL TRUST
The October 2007 pre-budget statement means that the IOU Trust is no longer necessary for married couples or civil partners. Current advice is that couples that already have this trust in their Wills do not need to take any action. They should however keep the situation under review until the legislation has been passed by Parliament (August 2008?). Under the proposals, if the first to die did not use all their inheritance tax allowance, the second to die can have the percentage of the current allowance that was not used when the first partner died. Keeping accurate records, especially of the first death, now becomes even more important.
The IOU Trust is still valid and desirable for couples who live together but are not married or civil partners. As it can still save up to 120,000 in inheritance tax.