Property redirected to the spouse or civil partner: introduction
The ability to vary the dispositions on death together with the exemption for transfers between spouses or civil partners (IHTM11032) provides a number of opportunities for estate planning. In many estates, this may be no more than the beneficiaries redirecting property so as to make sure that the estates of spouses or civil partners make maximum use of the two nil-rate bands that are available and may apply to property passing by will or under intestacy or to joint property (IHTM35092). In itself, this is inoffensive planning that simply makes best use of the exemption allowable in law. However, there are a number of schemes which seek to exploit the provisions of IHTA84/S142 by
- gifts back to the original beneficiaries (IHTM35093)
- the redirection of excluded property (IHTM35094) and
- creation of short-term interests for slightly longer than the statutory period. (IHTM35095)
You should refer all such cases to TG as directed in the instructions. You should similarly refer any other cases where it appears the taxpayer is seeking to exploit the provisions of IHTA84/S142.
More importantly you should not accept a variation as within IHTA84/S142 (1) until any investigation in accordance with these instructions on exploitation has been satisfactorily concluded. If its acceptance will result in a repayment of tax requiring the authority of your manager, you should not notify the parties that you accept the instrument as effective within the terms of IHTA84/S142 without the prior approval of your manager.