Everyone was saddened to hear of the death of Ronnie Corbett. He was an entertainer well loved by the British public for many years, and most especially known for his partnership with the late Ronnie Barker.
Following his death, there have been a number of media stories about him, and one in particular has focussed on the sale of his family home back in 2003 for £1.27 million. He and his wife moved into a bungalow several hundred metres away which they later purchased for £250,000. There are suggestions that the main reason for this move was to release the equity and gift it to his two daughters.Now, there are a number of reasons that people downsize, but inheritance tax planning may well have been the reason for it in this case. His wife, Anne Hart, has been outspoken about inheritance tax in the past and has publicly confronted the former shadow chancellor Ed Balls saying that it ‘steals the savings of hardworking people’.
So, it stands to reason that Ronnie and Anne may have taken steps to try to mitigate their inheritance tax liability. Under the current law, you are able to make gifts during your lifetime and as long as you survive for seven years following the gifts, there is no inheritance tax charged on the gift.If you don’t live for the full seven years, then depending on the size of the gifts, the inheritance tax charge may be reduced down from the normal 40%.
There are also other ways of mitigating your inheritance tax liability, for example by taking advantage of your annual exemption, small gifts exemption and utilising the normal expenditure out of income exemption. There is also the possibility of gifting into trusts and investing in inheritance tax efficient investments.
If you would like any further advice, please contact one of the Life team at Berwins at firstname.lastname@example.org or call us on 01423 543102.
Written by Julie Hutchinson of Berwins Solicitors.