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BUDGET 2008 NEWS |
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Trusts and estates Inheritance tax See TM ¶7178 HMRC has announced that there will be new legislation brought in concerning the changes introduced in Finance Act 2006 to interest in possession trusts set up prior to 22 March 2006. HMRC has said that the legislation will clarify the inheritance tax position where an interest in possession existing on 22 March 2006 comes to an end and is replaced with a new interest in possession trust, known as a transitional serial interest, (“TSI”) for the same beneficiary. The transitional period will also be extended from 5 April 2008 to 5 October 2008.
Income tax See TM ¶7335 HMRC has announced that the income arising from a settlor interested trust can be treated as the highest amount of income received by a settlor. This removes an anomaly within the legislation which treated the income from a settlor interested trust as charged to tax before savings or dividend income. The new legislation amends Finance Act 2006 and is treated as taking effect from 6 April 2006. The re-ordering of income may generate a tax repayment for individuals.
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