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T55 - Budget changes to inheritance tax. Changes to legislation means that you may need to review your will if you have left any assets in trust. This includes any trust set up for your surviving spouse because the assets may no longer be exempt from inheritance tax on your death even if they pass to your spouse. We would suggest that this matter be looked into after July when legislation will be enacted (in case of amendments). Deeds of Variation These are often used to re-write someone’s will more tax efficiently. At present, it seems that these are unlikely to be affected by the changes, in that any variation would still be treated as made by the deceased. If you are a beneficiary of an existing trust, and the assets are to be passed to your spouse on death, the assets will no longer qualify for the spouse exemption if you die after 2008. If you are getting divorced and your house are being left under a court order on trust for your spouse to be split between you and your spouse when your children reach 18, this transfer may be chargeable to IHT because spouse exemption is no longer available on this type of trust. However you may be able to argue against this as you are not making a gift.
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