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Veta Law

We help our clients pass on their wealth to the younger generation as tax efficiently as possible.

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Tax Planning; the Basics

We are experts in mitigating tax for our clients. The experts at Veta Law have over 35 years of experience in negotiating and settling tax cases with HMRC.

Often we work together with other professionals, such as accountants and financial advisors. This is to ensure that the tax planning you put in place fits smoothly alongside your other financial arrangements, for example, in relation to your business, investments and pension. We are here to help you and work with your other advisors, to save you the most tax.

As family life is sometimes complicated, it is even more important that you get professional help to organise your wealth in a way that fits your family.

Working out succession planning solutions for complex family circumstances is what we do.

“Veta Law advised my business partner and I about the succession of our business. They implemented a tax efficient strategy which was good for business and good for our families. ”

Mr Renshaw, York

“ On the sale of my business, Veta Law worked alongside my accountant, to ensure that my family trusts were used to save taxes. ”

Mr Carter, Preston

“ ” My husband and I asked Veta Law to ensure that our wills and trust arrangements saved inheritance tax for our children. We were pleased that the process was so straight forward. ”

Mr & Mrs Wilson, Beverley

Veta Law’s View

 

Whilst professional advice is likely to cost you, it could be well worth it, to ensure that a larger tax saving is achieved. As the tax rules keep changing, it is wise not to assume that you automatically qualify for reliefs and exemptions, unless you have obtained specialist advice. For example, if you prepared your Will prior to April 2017, you should review your Will to ensure you take advantage of the Residence Nil Rate Band.

There is more information about the Residence Nil Rate Band in the More Help About Tax Planning section below. We recommend you take tax planning advice early, as it can take time to secure some of the tax reliefs that are available.

How would HMRC know...?

As inheritance tax usually arises in family situations, we are occasionally asked how would HMRC know if… I kept my mother’s valuable brooch and didn’t declare it for inheritance tax purposes? Or how would HMRC know if… I gave my father’s valuable desk to his best friend?

There is a fundamental difference between having detailed knowledge of the legislation so that you can make the most of the reliefs and exemptions that are legally available to you, as opposed to being misleading or dishonest. Deliberate failure to declare assets to HMRC is tax fraud, which is a criminal offence for which the Executors can be prosecuted. Executors may also have to pay financial penalties (out of their own pocket) if the Inheritance Tax Account contains false information.

Maximising lifetime gift reliefs

We were instructed by a brother and sister, who were Executors of their late mother’s will. The value of her estate exceeded the Inheritance Tax threshold, and she had been generous to her children and grandchildren during her lifetime, making one-off gifts to her children as well as paying her grandchildren’s school fees and funding their music lessons. The school fees and music lessons amounted to over £75,000 in total, and on the face of it, these gifts were subject to Inheritance Tax.

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We obtained copies of her bank accounts for the period of 7 years prior to her death, and analysed the payments to and from her accounts. We were able to demonstrate to HMRC that the school fees and music lessons were regular payments from her surplus income, which meant they were exempt from Inheritance Tax (even though they were made within 7 years of her death). The Inheritance Tax saving was over £30,000.

Note: This section gives you real examples of cases we have dealt with. Our clients gave us their prior consent for this purpose, and names have been changed to protect confidentiality.

More Help About Tax Planning

 

Residence Nil Rate Band in Summary

In addition to the ordinary inheritance tax allowance of £325,000 per person, a further allowance was introduced in 2017 for people who pass on their main residence to direct descendants, such as children, grandchildren or great-grandchildren, on their death.  This further allowance is called the Residence Nil Rate Band (“RNRB“) and in tax year 2022/23, it amounts to £175,000 per person.  However, the allowance is reduced if the value of your estate exceeds £2 million, depending upon the value of your assets and your circumstances. 

The RNRB applies to single people as well as to married couples and civil partners.  The RNRB is also available if you have downsized to a smaller property on or after 8 July 2015, or if you sold your home since then without buying a replacement property. 

Overall, the RNRB is likely to be a great benefit to many people, however, the rules are quite complicated, and we recommend that you take professional advice to see how you can benefit.  If you made your Will before the introduction of the RNRB, you should review your Will to ensure you take advantage of it.  Structuring your Will appropriately to maximise the RNRB can give rise to a significant tax saving and we would be happy to advise you on this.

Executors and beneficiaries of estates should also consider whether a Deed of Variation (to alter the terms of a Will post-death) would allow the estate to benefit from the RNRB.  This is important if the deceased made their Will before the new rules were introduced.

Domicile

For more helpful information about domicile, the HMRC website is a good place to start. Here is a link to the domicile section of their website.  Or feel free to give us a call.

https://www.gov.uk/tax-foreign-income/non-domiciled-residents

 

VETA LAW CASES

 

Living Abroad

We were instructed by a lady, Patricia, whose brother, John, had unexpectedly died in his forties.He was born in a village in England where he had grown up together with Patricia. In his 20’s, John had relocated to Singapore.

John worked in Singapore for a large corporation, he had bought a home in Singapore and planned to live there for the rest of his life.

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However, following a break-up with his partner (who was from Singapore), he wanted a change of scene so he returned to England temporarily to be with his family. John had no children and wasn’t married. Whilst staying in England, he wanted to be earning an income and so he started teaching at a local college. Whilst working there, he suffered a stroke and unexpectedly died.

On death, inheritance tax is payable to HMRC on the value of your worldwide assets, if you are domiciled in the UK at the time of your death. Your domicile is decided based upon where you are born, where you spend (and intend to spend) your life and various other factors. (Please see the More Help About Tax Planning section above for more detailed information about domicile). Patricia’s late brother still had a property in Singapore as well as sizeable investments and savings there. Accordingly, there would be a large inheritance tax bill due to HMRC, if John was domiciled in the UK when he died. Patricia asked us to deal with the estate and we took tax advice in Singapore, which confirmed that in Singapore there was no inheritance tax. We built a case to prove that John had a Singapore domicile. We obtained witness statements from his friends and colleagues to verify his firm intention to return to Singapore. We gathered evidence of all his club memberships and assets still in Singapore. We negotiated with HMRC on Patricia’s behalf and were successful in persuading them that John had Singapore domicile. This meant that there was no inheritance tax on the estate, achieving a tax saving for our client of over £500,000.

Note: This section gives you real examples of cases we have dealt with. Our clients gave us their prior consent for this purpose, and names have been changed to protect confidentiality.

Payment of Capital Gains Tax
v. Inheritance Tax

We were instructed by a widow, Mary who is in her 70’s, to deal with her late husband’s estate. He died owning a sizeable property portfolio which he left one part to his widow and the other part to his 2 daughters.

The family wanted to sell the properties, as they did not want the ongoing responsibility of managing
them.

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Our focus was to ensure that the estate and the beneficiaries paid no more tax than was necessary, in order to maximise funds available to our client and her 2 daughters. We obtained professional valuations of the properties and agreed the property values with HMRC. We considered the tax exemptions, reliefs and rates of tax payable by executors and beneficiaries. There are options to allow a property in an estate to be sold either by the executor or by a beneficiary. We calculated which option was most tax efficient for each property sale. Some exemptions are renewed each year on 6 April. Therefore, we timed the sale of properties in different tax years to maximise the available exemptions. Our client understood tax was payable and was very pleased with our work, which achieved a tax saving of over £85,000.

Note: This section gives you real examples of cases we have dealt with. Our clients gave us their prior consent for this purpose, and names have been changed to protect confidentiality.