Budget Summary 2014 - page 10

when calculating the ten-year charge. The government will consult
further on the proposal to split the IHT nil-rate band available to
trusts and simplify the trust charges.
Trusts with vulnerable beneficiaries
The CGT uplift provisions that apply on the death of a vulnerable
beneficiary are extended from 5 December 2013, as previously
announced. From 2014/15, the range of trusts that qualify for
special income tax, CGT and IHT treatment will also be extended.
IHT: liabilities and foreign currency accounts
Funds held in foreign currency accounts in UK banks will be treated
in a similar way to excluded property for the purpose of provisions
that restrict how liabilities are deducted from the value of an estate
for IHT purposes.
IHT exemption for emergency service personnel
The government will consult on extending to members of the
emergency services the existing IHT exemption for members of the
armed forces whose death is caused or hastened by injury while on
active service.
Enveloping of residential property
The annual tax on enveloped dwellings (ATED) will have two new
bands. Properties worth over £1 million and up to £2 million will be
chargeable from 1 April 2015, with an amount of £7,000 in
2015/16. Properties worth over £500,000 and up to £1 million will
be chargeable from 1 April 2016, with an amount of £3,500 in
2016/17. The charges will increase each year.
Stamp duty land tax (SDLT)
The threshold for the 15% SDLT rate on residential properties
purchased by certain non-natural persons (eg companies) will be
reduced and will apply to properties worth over £500,000 for
transactions with an effective date from 20 March 2014. The
existing £2 million threshold will apply, subject to exceptions, where
contracts were entered into before that date.
BUDGET
19 MARCH 2014
page 10
think ahead
New rules apply to
liabilities on death.
For
example, if you borrowed
to buy an asset that
qualifies for IHT relief, your
potential inheritance tax
might now be much more
than you expect. You might
need to make some
changes to your planning.
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