Capital Acquisitions Tax
It is sometimes said that nothing in life is free. When one does manage to receive something for free (in the monetary sense at least) such as a gift or inheritance, it may well not be tax-free. This is due to the existence of Capital Acquisitions Tax (CAT) which is the collective term for what is commonly referred to as Gift Tax and Inheritance Tax.
Whilst CAT can be a burdensome cost when receiving a gift or inheritance, there are substantial reliefs within legislation and wide scope for planning to minimise potential liabilities.
At Brett & Co. we offer expert estate planning services and are proficient in all areas of CAT. Contact us for advice on any issue where CAT may be relevant, including, but not limited to, those listed below.
topCAT Assessment
When assessing CAT, there are numerous reliefs and exemptions which may apply to beneficiaries who might otherwise be subject to large CAT bills.
We can be consulted for accurate information and assessment of CAT on any past or proposed gift/inheritance, including advice on steps which can be taken to minimise CAT and information on your filing and payment obligations.
topEstate Planning (Disponer & Beneficiary Issues)
There comes a stage in all our lives when we must decide how we wish our assets to be distributed after we have passed on. Getting advice on the tax issues involved can help avoid unnecessary costs for all concerned once your assets are distributed.
If you are preparing your will, we can inform you and your intended beneficiaries of any CAT liabilities that will arise as a result of each proposed bequest so that you can take account of these costs in drafting your final will document. In addition, we can advise you on how your estate can be best structured from a taxation point of view and items that should or shouldn't be included in bequests in order to minimise tax liabilities on beneficiaries.
Equally, we can advise anyone who is in line to receive an inheritance of the CAT liabilities which will arise and steps which can be taken to minimise them. Other issues which both disponers and beneficiaries can consult us on include:
- The use of trusts.
- The taxation of personal representatives and administrators of estates.
- Granting limited or life interests in property.
- The consequences of a beneficiary disclaiming an inheritance.
- The implications of granting Special and General Powers of Appointment.
- The break-up of settlements (beneficiaries enlarging or disposing of their interests) and the taxation consequences.
topTransferring Business Assets
When a business person or farmer reaches retirement age, it is often their wish that their business or farming trade and assets be passed on to a family member. Such transfers can often have CAT implications, however relief may be available in certain circumstances.
n relation to transfers of business assets and any relief that may apply, it is essential to seek out the best advice possible. Whether you are a disponer or beneficiary, we can offer you expert taxation advice on all aspects of business transfers and advice on associated issues including:
- Transferring land or buildings held outside a business.
- Consequences of beneficiaries selling business assets.
topTrusts
When a beneficiary receives any benefit from a trust, there may be possible CAT and other tax liabilities arising. If you receive any benefit from a trust, we can advise you of any tax which is payable.
In addition, where assets are placed in a trust, there are potential liabilities to a unique form of tax known as Discretionary Trust Tax (DTT). We can advise you on all aspects of DTT including if and when it will become payable and when it will cease to be payable.
For information on trusts and Income Tax see the Estates & Trusts section of our Income Tax page.
For information on trusts and Capital Gains Tax, see the Trusts & CGT section of our Capital Gains Tax page.
topExemptions
There are certain transfers which are exempt from CAT.
We can advise you on whether a transfer you are party too is likely to be exempt or not and possible steps which can be taken to achieve exemption status, where relevant.