Something old, something new...

Something old

As you might have noticed, we don’t like to share the ‘same old, same old’ information that everybody else shares.

At this time of year, when the new tax year is looming, most advisers issue a checklist of things to remember. It’s boring, not a lot changes each year, and we assume you already know all the things you’re supposed to do.

If you really want to know, you’ll find a basic checklist at the end of this article.

Something new

From 6 April 2017, the new Residence Nil Rate Band (RNRB) is being introduced. It starts at £100,000 and increases by £25,000 each year to reach £175,000 by April 2020. You can use it against the value of your main residence as long as it’s passed to direct descendants of the deceased. If not fully used, RNRB is transferable between spouses in the same way as the standard nil rate band. It is reduced once the net estate value exceeds £2m.

The rules have some complex nuances which still need to be confirmed, and we expect less than 4% of people will benefit. If you want to maximise your available allowances, there are various other things you can do – just give us a call on 01435 863787.


Did you see this article in the Sunday Telegraph recently? It claims that a discretionary trust will require a Deed of Variation to claim any tax allowance.

Inheritance Tax Trap: more than 100,000 families won’t get the new tax break

Like many articles in the financial media, it’s a load of old rubbish (technical term). The article was brought to our attention by Solidus (our legal partners), because it’s superficial and incorrect in a number of ways.

They say: “If required, the trustees simply execute a Deed of Appointment out of the Trust of an appropriate value as part of the probate process. Rather than being a negative, Trusts are still a huge positive. Rather than abandon the value of the Trust that will protect the vast majority of the estate, a Trust can minimise the value appointed from it, therefore providing bloodline and generational IHT benefits to the rest of the estate.”

Do not be at all concerned if:

  • You are a single person with a Will Trust on an estate below £325,000 (or £650,000 if widowed with transferable NRB)
  • You are a married couple with a Will Trust on an estate under £650,000.
  • You’re a Plan 100 client – if a Trust is included in your financial planning, we will update it for you if required

Take extra advice on estate planning if you have:

  • An estate approaching or exceeding £2 million
  • An estate over £325,000 (single) or £650,000 married, with NRB or life interest clauses in your Will
  • A reasonable level of qualifying Agricultural or Business Property Relief assets

Something borrowed

“Neither a borrower nor a lender be”.
Polonius Act I, Scene III, Hamlet

We don’t think Shakespeare was talking about mortgages and investments. So here’s a dilemma. It’s nothing to do with tax – let’s call it a tax break (ha ha)!

Heather borrowed a book from her friend, Laura. it turns out that Heather is really bad at returning things she borrows. In fact, she’s had the book for over nine months.

Laura remembers her missing book every few months. She doesn’t want to nag, but does quite fancy reading it again herself. Every time Laura asks for the book back, Heather says: “I haven’t finished reading it yet. I really do want to finish it. I promise I will return it as soon as I’ve finished it.”

What would you do?

Something blue

Here’s your end-of-tax-year checklist, as promised above. It’s in blue text, to complete the theme.

If you are one of our clients, you don’t have to worry, because we keep everything under control for you. However, if you do have any questions, we are here to help – just get in touch.


  • Have you used all your annual pension allowance in the three previous tax years? If no, can you carry forward any contributions?
  • Did your pension benefits total over £1.25m on 5 April 2014? If yes, have you applied for Individual Protection 2014?
  • Did you reach state pension before 6 April 2016? If yes, should you top it up with Class 3A voluntary contributions?
  • Have you triggered the Money Purchase Annual Allowance? If yes, have you used your full £10,000 allowance in time?
  • Have you accurately assessed your total level of income for the tax year? Should you make up any shortfall in pension contributions?
  • Is there scope to make pension contributions or sacrifice salary to reduce your income into a lower tax band, to maintain your full personal allowance, or to retain your entitlement to child benefit?


  • Have you split your Investments and personal allowances between you and your civil partner/spouse in the most tax-effective way?
  • If you or your civil partner/spouse is a non-taxpayer, have you applied for marriage allowance?
  • Do you have investments in an interest-paying OIEC/UT? If yes, there will be no tax to pay if the income is fully within your personal savings allowance
  • If you are an employer, consider paying salaries/bonuses/dividends before 6 April to use up allowances
  • Have you utilised your full 2016/17 ISA allowance?
  • Is there a tax advantage in cashing in your onshore and offshore investment bonds?
  • Are you a higher/additional rate taxpayer looking to make regular savings over the long term? If yes, have you considered a Maximum Investment Plan?
  • Have you considered an Enterprise Investment Scheme or Seed Enterprise Investment Scheme? (Could reduce your income tax bill to zero, with unlimited CGT deferral.)
  • What about a Venture Capital Trust? (Zero income tax, tax-free dividends and no CGT.)


  • Have you realised this year’s gains or losses in order to make use of your CGT annual exempt amount for yourself and your spouse?
  • Have you shared investments such as growth unit trusts/OEICs between yourself and your civil partner/spouse?


  • Have you made maximum use of IHT gifting?
  • Is it worth transferring assets into a discretionary trust?
  • Do you have business assets that qualify for Business Property Relief or Agricultural Property Relief?


  • Do you have any Child Trust Funds? Have you invested the maximum allowed? Have you considered transferring them to a tax-free Junior ISA?
  • What about investing in growth collectives (to use the child’s own CGT allowance) or an offshore single premium bond (to offset against the child’s income tax personal allowance)?
  • Or a discretionary trust that might bring income tax benefits?
  • You could even start a pension for the child (they can’t access funds until age 55)


Lance Baron

Certified Financial Planner (CFP) based in East Sussex, UK. We support people in Southeast England with more than £500K to invest by building a financial plan that will help them live the life they want… until age 100